Mindset When the Cryptocurrency Market Experiences Downward Movement

Last Night's Plummet: A Textbook Case of Technical Analysis

Last night's movement of Ethereum was truly a textbook example of technical analysis. After a brief adjustment in the afternoon, it rose to $4,340 before the opening of the U.S. stock market, and then plummeted down to $4,064. This was not just a "whim of the market," as important technical indicators had issued warnings in advance. The 30-minute RSI reached an oversold level of 22.7, suggesting the possibility of a short-term rebound. However, the 4-hour MACD still showed a bearish trend, indicating that downward pressure remained.

Movements of Institutional Investors: The Underlying Trends Behind the Plummet

In contrast to the plummet in prices, it seems that institutional investors were quietly engaging in "bottom fishing." According to data, the weekly net inflow into Ethereum ETFs reached $2.9 billion, accounting for 80% of the total inflow into cryptocurrency ETFs. The cumulative inflow for August surpassed $11 billion. This means that approximately $160 million of "smart money" is buying Ethereum each day. Institutional investor inflow into Ethereum ETFs

However, the reason the price continues to plummet is in the derivatives market. The open contracts for futures have reached a new record of $60.8 billion, with long position liquidations accounting for nearly 90% of the total. This indicates that traders using leverage have suffered significant losses. Institutional investors are taking this opportunity to accumulate assets at low prices, absorbing funds from individual investors. Analysis of the Ethereum Derivatives Market

Today's Market Outlook: Stability During the Day, Significant Movements at Night

Based on technical analysis and market sentiment, today's market may rebound to around $4,150-4,180 during the day. Alternatively, it may first decline to around $4,064 before rebounding. $4,064 is an important support line, and if it is broken, there is a possibility of a decline to $3,995-3,800. In the evening, the movement after the start of the U.S. stock market will be key; if $4,064 is maintained and $4,200 is recovered, there is a possibility of a rebound to $4,350-4,400, while there is also a possibility of testing the demand zone around $3,800.

Trading Strategy: Be agile in the short term, invest at low prices in the long term.

There are two strategies for short-term traders. As a short-selling strategy, consider taking a short position if there is a rebound in the range of $4,150 to $4,200, with a stop-loss line set at $4,250 and a target set below $4,050. As a buying strategy, consider taking a long position if it stabilizes in the range of $4,064 to $4,080, with a stop-loss line at $3,990 and a target set above $4,180. Risk management is crucial, and do not take more than 2-3% of your capital at risk in a single trade. Pay attention to the increased volatility at the start of the U.S. stock market and keep an eye on the Federal Reserve's policy outlook and the movements of the dollar index.

The cryptocurrency market is not a gambling place where you can "become a millionaire overnight," but rather a battlefield where "knowledge is monetized." Last night's plummet of Ethereum was a "market correction" by institutional investors and an opportunity for wise investors to "build positions." As analyst James Seyffart points out, "The continued inflow of funds into Ethereum ETFs indicates that institutional investors are strategically allocating Ethereum as a 'core digital asset.'"

Currently, Ethereum is struggling around $4,100, but the real battle is just beginning. After the U.S. stock market opens tonight, the flow of funds from institutional investors and macroeconomic trends will determine the next important direction. It's essential to stay calm, analyze without being swayed by market sentiment, and seize opportunities.