Event Review 📉
In the early hours of November 5, the ETH market experienced a dramatic shock. Initially, a large amount of negative news broke out in the market, resulting in massive liquidations in the contract market—within just one hour, the total liquidation amount across the network reached $103 million, with ETH liquidations amounting to $29.53 million, and a particularly high proportion of long positions being liquidated. Meanwhile, the U.S. Senate failed to pass a temporary funding bill, heightening concerns that a potential U.S. government shutdown could break the historical record of 35 days. This series of events quickly ignited risk-off sentiment in the market, triggering a sharp wave of sell-offs.
Timeline 🕒
- 01:31 – Concentrated exposure of negative market news, followed by massive position liquidations; U.S. political uncertainty intensifies risk-off sentiment.
- 02:00 – ETH price began to plummet rapidly from around $3,373, with signs of a cascading liquidation effect emerging.
- 02:32 – ETH broke through the key support level of $3,300, breaching technical defenses and triggering more stop-loss liquidations.
- 02:35 – According to trading data, ETH price dropped further to around $3,255, with a cumulative decline of 3.46%, indicating that market panic continued to spread.
- 03:00 – Despite a partial rebound after the intense sell-off, with ETH price climbing to $3,305.67, overall volatility remained high and investor sentiment had not fully recovered.
Reason Analysis 🔍
This market fluctuation was mainly influenced by two major factors:
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Macroeconomic Policy and Political Uncertainty
The U.S. government has been repeatedly embroiled in shutdown crises, with the latest news showing that the funding bill has stalled and may lead to a record-breaking shutdown duration. Political uncertainty has driven global capital toward low-risk assets, reducing liquidity in the crypto asset market and exerting strong downward pressure on the market. -
High Leverage Positions Triggering Cascading Liquidations
Some traders in the market used high leverage strategies, and as prices fell, stop-loss and liquidation orders were triggered one after another. The rapid liquidation of long positions and the cascading effect further amplified price volatility, causing market sentiment to deteriorate sharply in the short term and accelerating the sell-off.
Technical Analysis 📊
Based on Binance USDT perpetual contract 45-minute candlestick data, here are the technical observations for ETH/USDT:
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Price Trend and Moving Average Alignment
The current price is moving along the lower Bollinger Band and is below the MA5, MA10, MA20, MA50, and EMA series (EMA5/10/20/50/120) moving averages. The moving averages are clearly in a bearish alignment, indicating a strong downtrend. The slopes of EMA20 and EMA120 are -1.83% and -0.65%, respectively, further confirming that the medium- and long-term downward momentum should not be underestimated. -
Indicator Signals
Although the KDJ indicator has issued a golden cross signal and is in the oversold region, suggesting a possible short-term rebound, the OBV indicator has broken below previous lows, indicating that selling pressure remains strong. The MACD histogram has been shrinking consecutively, and the RSI is in the oversold zone, suggesting that the market may stabilize briefly after the sharp sell-off, but the overall momentum has not yet fully reversed. -
Trading Volume
Trading volume has surged significantly (up 53.53% compared to usual), and the 10-day and 20-day average volumes have increased by 96.62% and 50.98%, respectively. This indicates unusually high trading activity among both retail and institutional investors, with market sentiment fluctuating sharply and the possibility of repeated tug-of-war in the short term.
Market Outlook 🔮
In the short term, although oversold signals from technical indicators may offer ETH some opportunities for stabilization and rebound, the macro environment and high leverage cascading liquidation effects will continue to exert downward pressure on the market. If the U.S. government shutdown persists, risk-off sentiment may deepen, further restricting market liquidity and limiting the strength of ETH's rebound. Investors are advised to remain cautious, pay attention to key support levels (such as $3,300 and lower technical supports), and allocate positions reasonably to guard against potential risks.
In the medium to long term, a fundamental recovery in the market will require clearer macro policies and a revival of investor risk appetite. If the technical side can gain substantial support at key levels, a trend reversal may be possible, but current volatility remains extremely high and the future trend is still full of uncertainty.
Overall, this round of market volatility mainly reflects the swing in market sentiment between macro policy uncertainty and high leverage risk. Investors need to maintain clear judgment amid turbulence, closely monitor changes in market liquidity and technical signals, and implement effective risk control.
