Brothers, at 2 PM Beijing time, ETH is undergoing a brutal test, with the price having fallen below the key psychological level of 3,000 USD, currently reported at about 2,937 USD, with a 24-hour drop of over 6%. The market is in mourning, but we need to see the underlying data of the long-short battle more clearly.
Three major drivers of the crash
Macroeconomic liquidity exhaustion: Year-end market liquidity is evaporating rapidly. This amplifies any decline, forming a vicious cycle where 'every drop evolves into a larger fall.'
High leverage cascading liquidation: Within 24 hours, over 600 million USD contracts were liquidated across the network, with 184,600 people liquidated. A well-known whale's 25x ETH long position was also liquidated to only 28% of its position, creating significant downward pressure.
Risk assets generally decline: the drop synchronizes with the weakness of US tech stocks, and market risk appetite has generally decreased.
Three Pillars of Turnaround
Institutions are still greedily accumulating: despite the price drop, JPMorgan announced it will launch a tokenized fund on the Ethereum mainnet. At the same time, the US spot Ethereum ETF experienced a brief outflow, but overall net inflow was $209 million in the past week.
Whales and smart money are buying the dip: Data shows that whales are raising large amounts of funds to purchase ETH during the crash. Meanwhile, the ETH supply on exchanges has dropped to 8.7%, a new low since 2015, indicating that a large amount of ETH is being withdrawn and locked, and the "bullets" in the market are decreasing.
Fundamentals remain unchanged: Ethereum network transactions remain active, with average transaction costs extremely low. The ecosystem continues to develop, for example, the Synthetix protocol is about to return to the mainnet.
Key observation points
Recent support: around $2,940. If it breaks down on high volume, the next key area is at $2,800.
Bullish reversal signal: A strong recovery above $3,200 is needed (this position also accumulates significant short liquidation pressure) to reverse the short-term downtrend.
Conclusion
The current sharp decline is driven by "macro liquidity tightening + high leverage clearing" causing short-term pain, but the long-term logic of "institutional accumulation + on-chain scarcity" remains intact. For spot players, panic zones are often opportunities to gradually position in quality assets; for contract players, please reduce leverage and respect the market before determining direction.
