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ETH Volatility: In-Depth Analysis of Macro Shocks and Technical Liquidations

ETH Volatility: In-Depth Analysis of Macro Shocks and Technical Liquidations

AICoinAICoin2025/09/25 20:31
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By:AiCoin

Event Review 📉

Recently, the ETH market experienced a dramatic fluctuation. At the opening, the ETH price was stable at around $4,000, but soon underwent a sharp decline. Data shows that within just 1 hour and 45 minutes, the price dropped from about $4,001 to $3,822, a decrease of approximately 4.47%. Another set of data indicates that within 111 minutes, the price quickly fell from $4,005 to $3,838 (a drop of about 4.16%). Subsequently, some buyers took advantage of the dip to accumulate, and by 02:15, the latest observed market price had risen to $3,887.01. Overall, the market was not only impacted by macro news but also saw intensified selling pressure due to technical chain liquidations.

Timeline ⏱

  • 00:00: The market opened with ETH price hovering around $4,000. At this time, expectations of a Federal Reserve rate cut and news of US political uncertainty began to ferment, leading investors to adopt a more cautious sentiment.
  • 00:00–01:45: The market faced strong selling pressure, with ETH price plunging from about $4,001 to $3,822, severely damaging key support levels. Large sell orders and frequent chain liquidations occurred, capital flowed out rapidly, and market panic intensified.
  • 02:15: Latest data showed ETH price rebounded to about $3,887.01, indicating that some funds started accumulating at lower levels, but the overall market remained volatile and highly turbulent.

Reason Analysis 🔍

This sharp fluctuation in ETH was mainly caused by two major factors:

  1. Macroeconomic and Policy Uncertainty
    Recently, expectations of a Federal Reserve rate cut, the failure of a temporary spending bill to pass smoothly, and ongoing policy disputes have raised concerns about liquidity and risk outlook in the market. Risk appetite has declined, and investors have shifted to more stable asset allocations, resulting in selling pressure in the crypto asset market.

  2. Technical Chain Liquidation Effect
    On the technical side, after ETH price broke below the key support level (around $4,000), a large number of long positions were liquidated and forced to close. Data shows that within the past hour, the total amount of liquidated contracts across the network reached $40 million, with long positions accounting for as much as 87%. This chain liquidation effect intensified market panic and pushed prices further down.

Technical Analysis 📊

Based on Binance USDT perpetual contract ETH/USDT 45-minute candlestick data, we can observe:

  • Bollinger Bands Analysis: The price is close to the lower Bollinger Band. Although there was a brief rebound, if it continues to move along the lower band, it indicates a weak market, and short-term buying requires more confirmation signals.
  • KDJ and RSI Indicators: The J value in the KDJ indicator shows obvious oversold signals, and RSI has also entered the oversold zone, suggesting a short-term rebound may be triggered after some selling, but this requires macro risks to ease before it can take effect.
  • Moving Average System: The price is currently below the MA5, MA10, MA20, MA50, as well as EMA5, EMA10, EMA20, EMA50, and EMA120 moving averages. All moving averages are arranged in a bearish pattern, indicating that the overall short- to medium-term downtrend continues. At the same time, EMA24 and EMA52 also show a steep downward slope.
  • Volume Observation: Trading volume has increased significantly compared to the recent 10-day average (up about 68.24%), accompanied by large sell orders and a net outflow of $100 million from major players, indicating unusually active market activity and significant capital outflow pressure.

Market Outlook 🚀

Although some funds have been observed accumulating at lower levels and the price rebounded to $3,887 at 02:15, overall market sentiment remains sluggish and risk appetite is still lacking. The future trend may depend on the following aspects:

  • Macroeconomic Policy Changes: If the Federal Reserve or other key economic data turn positive, it may improve market liquidity, ease panic, and provide price support; conversely, continued uncertainty will keep ETH under pressure.
  • Technical Support Significance: Changes in technical indicators such as RSI, Bollinger Bands, and moving average systems will be key reversal signals in the short term. Investors should watch for the formation of buy signals and clear signs of a bottoming out and stabilization.
  • Risk Control: Amid current sharp volatility, it is recommended to remain cautious, manage positions reasonably, and closely monitor market liquidation data and large transaction dynamics to ensure capital defense and risk allocation.

In summary, this sharp fluctuation in ETH reflects the impact of global macroeconomic uncertainty on market sentiment and exposes the accelerated decline caused by technical chain liquidations. Whether the market can rebound in the future will depend on positive macro news and stabilization signals from technical indicators. Meanwhile, investors should remain cautious and closely monitor market trends to accurately seize opportunities amid volatility.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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