Ethereum Short-Term Trend Analysis: Is a Pullback a Good Time to Buy?

Ethereum Short-Term Trend Analysis: Is a Pullback a Good Time to Buy?PrefaceHello everyone, I'm Lei Gong! Yesterday, I analyzed the short-term trend of Bitcoin, and the conclusion was that it would rise. However, the actual result was only a brief surge, followed by a drop below the first support level

Ethereum Short-Term Trend Analysis: Is a Pullback a Good Time to Buy?

Preface

Hello everyone, I'm Lei Gong! Yesterday, I analyzed the short-term trend of Bitcoin, and the conclusion was that it would rise. However, the actual result was only a brief surge, followed by a drop below the first support level. Nonetheless, it is still trading within the range. The market has been experiencing continuous liquidations in the past two days, with a total of $3.5 billion liquidated within 24 hours, with $2.9 billion among long positions. Many people believe that bull markets are easy to make money in, but in reality, they are the graveyard for retail investors.

The Trap of a Bull Market

During this bull market, many investors missed the initial rise and waited for Bitcoin to drop significantly. However, they watched helplessly as Bitcoin broke through $70,000, and eventually they couldn't resist entering the market. This anxious feeling of missing out can be seen from the changes in the market greed index. However, many investors were trapped soon after entering the market, and only they can understand the feeling of helplessness.

Difference Between Bear and Bull Markets

During a bear market, most investors use small capital to enter the market, and even if they lose money, the loss will not be too significant. However, bull markets are different. Everyone believes that bull markets make money, so they will try every means to invest all their capital, even high-risk funds. Therefore, it is easier to lose a large amount of money in a bull market. The financial market does not make money with intelligence, but rather the smarter people are, the higher the probability of losing money.

The Price of Greed

Facing the market trend, many people will regret not buying at the low point and selling at the high point. They are always trying to make every penny in the market. However, this thinking will only lead to losses. Without trading skills and the support of professional institutions, how many people can really make money even in a bull market?

ETH Short-Term Trend Analysis

Today we will discuss the short-term trend of ETH. The ETH 4-hour chart is currently moving within a descending channel. After touching the lower boundary of the descending channel, it bounced back. This time, ETH touched the support level again, but the trading volume increased, indicating that the bears are stronger, and there are no signs of stopping the decline yet.

Support Levels and Volume-Price Divergence

There are two support levels below, one is the lower boundary of the descending channel, and the other is $3200. Overall, the ETH 4-hour chart has formed a volume-price divergence, and it's near the lower support level. This is a sharp drop, and there should be an inertial decline. Once there are signs of stopping the decline, the Ethereum 4-hour short-term trend will see a surge.

Behind the Pullback

Although it seems that ETH is falling sharply, this is just an illusion, aimed at exploding contracts. As mentioned earlier, March is the quarterly settlement month, and pullbacks are normal. This pullback is the advance of the quarterly settlement trend, but the bull market has not ended, and the pullback is a good opportunity to buy.

Magnitude of ETH Pullback

Some people may say that ETH has already pulled back by 20%, isn't that a big pullback? To judge the magnitude of the pullback, we need to look at the overall trend. ETH first surged before pulling back. So far this month, the overall fluctuation of ETH has fallen by less than one point.

Following the Trend and Seizing Opportunities

As mentioned earlier, trading should follow the trend. When the market is bullish, don't short sell, just wait until the trend reverses, there are signs of stopping the decline, and then buy long.

Short-Term Trading Strategy

The 4-hour trend changes quickly, so it's best to take profits when you see them in the short term and avoid getting trapped due to greed. Short-term trading emphasizes capital utilization, so you need to be willing to take profits and dare to stop losses. Otherwise, the significance of doing short-term trading is lost.

Disclaimer

The above analysis is for reference only and does not constitute any investment advice.

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In-depth Analysis of ETH Short-Term Trend

1. Technical Indicator Analysis

According to the ETH 4-hour chart, we can use some technical indicators for further analysis:

• MACD Indicator: The MACD indicator shows that the ETH fast line and slow line are currently both below the zero axis, and there is a clear downward crossover, indicating that the short-term trend is weak.

• RSI Indicator: The RSI indicator shows that the ETH RSI value has fallen below 30, entering the oversold area, indicating that the short-term decline of ETH has been excessive and a rebound may occur.

• Bollinger Band Indicator: The Bollinger Band indicator shows that the ETH price has fallen below the lower band, and is approaching the lower band support level, indicating that the decline in ETH may continue, but it may also rebound after touching the support level.

2. News Analysis

In addition to technical indicator analysis, we also need to pay attention to some important news factors:

• Ethereum 2.0 Progress: The progress of Ethereum 2.0 has been closely watched. Once Ethereum 2.0 goes live, it will have a significant impact on the ETH price.

• DeFi Boom: The continued development of the DeFi boom will also provide continuous support for ETH.

• Institutional Investor Entry: Recently, more and more institutional investors have started to focus on Ethereum, which will bring new capital inflows to ETH.

3. Market Sentiment Analysis

Changes in market sentiment will also affect the price of ETH. We can observe market sentiment through the following aspects:

• Social Media Heat: We can judge the market's attention to ETH through the amount of discussion on related topics on social media.

• Exchange Funds Flow: We can judge whether funds are flowing into or out of ETH through the exchange funds flow.

• Liquidation Data: Liquidation data can reflect the extreme level of market sentiment. When liquidation data increases significantly, it often indicates that market fluctuations are intensifying.

4. Action Strategy Suggestions

Based on the above analysis, we can propose the following action strategy suggestions:

• Buy Low: If the ETH price falls below the $3200 support level, you can consider buying low. The target price can be set at $3500.

• Set Stop Loss: Setting a stop loss can effectively control risks. It is recommended to set the stop loss at around $3100.

• Observe Signs of Reversal: Pay attention to the trend of ETH. Once there are signs of reversal, such as a golden cross in the MACD indicator, the RSI indicator rising above 50, or the Bollinger Band indicator converging, you can consider holding or buying more.

• Avoid Chasing the Market: In a highly volatile market, try to avoid chasing the market and be cautious. Wait for a suitable opportunity to enter the market.

Summary

The short-term trend of ETH is currently complex, but overall, pullbacks are normal and a good opportunity to buy. Investors need to prepare thoroughly, conduct comprehensive analysis based on technical indicators, news, market sentiment, etc., and formulate a reasonable trading strategy in order to seize opportunities in the fluctuation of ETH.

Finally, it must be emphasized again that the above analysis is for reference only and does not constitute any investment advice.