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The Storm Behind ETH's Volatility: Event Review and Technical Analysis

The Storm Behind ETH's Volatility: Event Review and Technical Analysis

AICoinAICoin2025/10/13 05:48
Show original
By:AiCoin

🔍 Event Review

Recently, ETH experienced a dramatic fluctuation within just a few hours. Starting from a high of around $3,814 at 03:00 (UTC+8), the market began to show signs of a sharp decline, dropping to a low of about $3,640. Although there was a brief rebound to $3,728.9, the overall volatility remained intense. Large whale funds taking profits and liquidating positions, leveraged positions triggering liquidations, coupled with external policy and macroeconomic uncertainties, all catalyzed this market storm, causing market sentiment to shift from mild to extremely tense in an instant.

⏱️ Timeline

  • [03:00] ETH price was around $3,814, with initial signs of a downturn in the market.
  • [03:53] Trading activity surged, with Bybit data showing ETH/USDT trading volume skyrocketing by over 1,019.83%, indicating a sudden increase in selling pressure.
  • [04:07] Whale Alert detected a transfer of 26,336 ETH from FalconX to an unknown wallet, signaling a clear outflow of large funds.
  • [04:31] ETH price broke below the key $3,700 level, and market panic quickly spread.
  • [04:51] ETH price fell to around $3,660, with a cumulative drop of 4.04%.
  • [04:53] Indian tax authorities launched an investigation into Binance users suspected of tax evasion, significantly increasing external policy risk.
  • [05:00] ETH price further dipped, hitting a low of about $3,640.
  • [05:07] A transfer of 14,643 ETH to an unknown wallet was detected, indicating continued large-scale fund migration.
  • [05:10] Another 24,674 ETH was transferred into Robinhood, with exchange fund flows becoming unusually active.
  • [05:15] ETH price saw a brief rebound, rising to $3,728.9, but overall market volatility remained intense.

⚠️ Cause Analysis

This round of sharp ETH price fluctuations was mainly driven by two major factors:

  1. Large Fund Operations and Leverage Position Crisis
  • Multiple large whale assets taking profits and continuous market sell orders quickly squeezed liquidity.
  • Leverage short positions were continuously triggered, causing a chain liquidation effect, resulting in a rapid price drop and further intensifying market panic.
  1. Macroeconomic and Policy Uncertainty
  • External economic turbulence (such as uncertainties triggered by US government-related issues) heightened risk aversion.
  • India's investigation into Binance users suspected of tax evasion, along with other policy risk news, led the market to adopt a cautious and wait-and-see attitude, resulting in rapid capital withdrawal.

📊 Technical Analysis

Based on the 45-minute ETH/USDT candlestick data from Binance USDT perpetual contracts, we can observe the following key technical signals:

  • MACD Indicator

  • A death cross formed and continued to run below the zero axis, sending a strong sell signal.

  • Bollinger Bands and KDJ

  • The price once rebounded from the lower Bollinger Band, indicating some buying interest, but overall it continued to hover near the lower band.

  • The KDJ golden cross signal provides a glimmer of optimism for a possible short-term reversal, but the overall strength is weak.

  • Moving Average Performance

  • The price remained below MA5, MA10, MA20, and MA50, with multiple moving averages showing a clear bearish alignment, indicating a long-term downtrend.

  • All EMA moving averages (EMA5, 10, 20, 50, and 120) also showed a downward slope, especially EMA120 with a slope of -0.67%, further confirming the weakening long-term trend.

  • Trading Volume and Liquidation Situation

  • Data shows that the total liquidation amount across the network reached about $30 million in the past hour, with long positions accounting for as much as 73%, indicating that selling pressure is dominant.

  • Trading volume surged (10-day average volume increased by 64.02%). Although some data (such as the OBV indicator turning from negative to positive) suggests that capital sentiment may improve, overall, the market is in a state of short-term momentum weakness.

🔮 Market Outlook

In the short term, the market remains highly volatile. Some short-term buying may enter at key support levels, but under the influence of large selling pressure and leveraged liquidations, the risk of ETH continuing to decline in the short term cannot be ignored.

In the medium term, if macro policy risks ease or institutional capital confidence is boosted, ETH is expected to stabilize and rebound after a technical correction. However, the current multiple negative signals indicate that investors need to pay close attention to the following points:

  • Risk Management: In a tight liquidity and high volatility environment, traders are advised to appropriately reduce positions and set stop-losses reasonably.
  • Capital Flow Monitoring: Closely track the movements of large whale funds and capital dynamics within exchanges to respond promptly to possible chain reactions.
  • Macroeconomic Policy and External Developments: Continue to monitor global macroeconomic and regulatory news, as any policy change could trigger another round of market volatility.

In summary, the recent sharp decline in ETH reflects the market's fragile state under the dual pressure of internal capital stress and external policy uncertainty. Investors should remain cautious in their operations, closely monitor changes in technical indicators and large fund flows, and manage risks effectively to navigate possible future market adjustments during this storm.

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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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