🚀 Event Review
Recently, the Ethereum (ETH) market experienced a rare and dramatic fluctuation. Within just a few minutes, the ETH price plummeted from around $4,427 to $4,333, a drop of 2.12%. In the following 40 minutes, it continued to decline, with an overall drop of about 1.7%. This volatility not only reflected the market's short-term panic sentiment but also exposed the compounded effects of macroeconomic data, regulatory policy developments, and institutional behavior on price shocks.
⏰ Timeline Review
- 22:00: The YanYu community started a livestream discussing the US August non-farm payroll data expectations. The market generally believed that employment data was weak, suggesting that the Federal Reserve might initiate a rate-cutting cycle.
- 22:01: A White House economic advisor revealed information, hinting that the Federal Reserve might discuss significant rate cuts, intensifying concerns about the economic and liquidity easing outlook.
- 22:10: ETH price plunged within 13 minutes, dropping from around $4,427 to $4,333, indicating rapid capital outflows.
- 22:10 to 22:51: Driven by continuous panic sentiment, ETH price kept falling, finally reporting $4,265.16 at 22:51, reflecting a consensus in the market that selling pressure on risk assets was intensifying.
🔍 Cause Analysis
This round of ETH price plunge was driven by multiple factors:
Macroeconomic Impact
Recent US employment data fell short of expectations, and the weak growth in non-farm payrolls led the market to expect the Federal Reserve to start or even aggressively cut rates. Funds quickly shifted between risk assets and safe-haven assets, resulting in severe selling pressure on risk assets—including ETH.
Regulatory Developments and Institutional Actions
Recently, US regulatory agencies released their spring crypto regulatory agenda and issued a joint statement with the CFTC, raising new concerns about compliance costs and cross-border trading models. At the same time, institutions and large holders frequently conducted large-scale asset transfers and major portfolio adjustments, further intensifying short-term market panic. These factors collectively drove the irrational volatility in ETH prices.
📊 Technical Analysis
Based on the Binance USDT perpetual contract 45-minute candlestick chart, technical signals have given a clear warning for the short-term trend:
- Moving Average System: The EMA5 has crossed below the EMA10, forming a death cross, indicating increased short-term bearish pressure; meanwhile, the price is below the EMA5/10/20/50/120 moving averages, showing an overall downtrend.
- Oscillator Indicators: MACD has formed a death cross, and RSI has fallen below the 50 midline, both showing clear sell signals.
- Bollinger Bands Analysis: The price has broken below the middle band of the Bollinger Bands, and the %B indicator has dropped below 0.2, indicating the market is close to oversold territory. Although the J value is in an oversold state and there may be a short-term rebound opportunity, the overall downtrend should not be ignored.
- Volume: Trading volume surged by 343.48% in the short term, but with the price falling, this indicates strong panic selling sentiment in the market.
- Other Technical Patterns: The candlestick chart shows Marubozu and Belt Hold patterns, all indicating fierce battles between buyers and sellers and significant market pressure.
🔮 Market Outlook
Currently, ETH price is in a clear downtrend, but the oversold technical indicators also suggest there may be a short-term rebound opportunity. However, considering expectations of a macroeconomic slowdown and regulatory policy uncertainty, the market may continue to fluctuate in the future.
Looking further:
- In the short term, if market sentiment can be alleviated at key support levels, coupled with the effect of some rebound indicators (such as the J value oversold signal), ETH may see a structural rebound. However, overall, short-term volatility risks remain.
- For the long-term outlook, attention should be paid to changes in US economic data, regulatory policies, and the global liquidity environment. If macro data improves and regulation becomes clearer, the market is expected to gradually stabilize; otherwise, continued uncertainty may lead to prolonged weakness in risk assets.
For investors, in such a highly volatile environment, it is especially important to remain calm, control positions, and focus on risk management. It is recommended that investors with low risk tolerance wait for clearer directional signals, while those with higher risk tolerance should lay out positions cautiously and seize short-term rebound opportunities.
