Recently, the cryptocurrency market has experienced severe volatility, with the price of Ethereum plummeting from a high of $3800 to $2300, a decline of over 40%. Panic sentiment is spreading across the market, with a total liquidation amount of up to $2.2 billion. After this bloodbath, has Ethereum already hit the bottom? Is it time to buy the dip? This article will analyze the situation from three perspectives: technical analysis, fundamentals, and macro environment, to provide references for investors.
1. Technical Analysis: Oversold signals are emerging, and a short-term rebound is to be expected.
Price Trend: The daily chart of Ethereum shows a series of consecutive large bearish candles, with an entity strength exceeding 2%, forming a waterfall breakdown pattern. The 21-week EMA has fallen below the 50-week EMA, creating a death cross technical pattern. The key support level is at $2100, with strong support at $2000, and short-term resistance at $2600.
Technical Indicators: RSI close to 30, indicating oversold signals; MACD indicator, after turning negative, has not yet dropped below the levels of mid to late November last year, suggesting there may still be adjustment space in the short term.
Market Sentiment: The crypto fear and greed index is at 29, in the "fear" range (25-49). In the past 24 hours, the total market capitalization of the crypto market has evaporated by about $111 billion, with liquidation amounts reaching as high as $2.2 billion.
II. Fundamental Analysis: Ethereum remains the leading smart contract platform.
Technical Strength: Ethereum, as a leading smart contract platform, has a solid position, and the Layer 2 ecosystem continues to develop. The Ethereum 2.0 upgrade has been completed, significantly enhancing network performance.
Ecosystem Development: DeFi, NFT, GameFi, and other ecosystems continue to prosper, and Ethereum remains one of the most active smart contract platforms.
Institutional Recognition: Institutional funds continue to flow into Ethereum ETFs, revealing long-term allocation value. As of the end of 2025, the total net inflow into U.S. Ethereum spot ETFs is $9.6863 billion.
III. Macro Environment Analysis: Federal Reserve policy shift, still beneficial in the long term.
Federal Reserve Policy: The Federal Reserve announced at the January 28 meeting to maintain interest rates at 3.5%-3.75%, ending three consecutive rate cuts since September 2025. Powell emphasized that the current interest rate is at the "upper end of the neutral range," and the pace of inflation decline is slower than expected, with the first rate cut potentially delayed until June 2026.
Global Economic Conditions: U.S. economic growth is slowing, and inflation pressures remain; the European economy faces recession risks, and the European Central Bank may start cutting rates in the second quarter of 2026; China's economic recovery momentum is good, and monetary policy remains accommodative.
Geopolitical Risks: Ongoing geopolitical tensions in the Middle East may affect global energy markets; U.S.-China relations remain tense, which could impact global trade and investment.
IV. Investment Suggestions: Cautious in the short term, layout for the long term.
Short-term Strategy: Remain cautious and avoid chasing high prices. If the price falls below $2100, consider gradually building a position; if it rebounds above $2600, consider partial profit-taking.
Medium to Long-term Strategy: Ethereum's fundamentals remain strong, with a solid position as the leading smart contract platform. Institutional funds continue to flow into Ethereum ETFs, revealing long-term allocation value. If the Federal Reserve begins to cut rates in the middle of the year, Ethereum is expected to challenge the $3000 mark again.
Risk Control: Strictly set stop-loss, with a single loss not exceeding 2% of total funds. Reasonably control position size to avoid high leverage operations.
[Conclusion]
Ethereum's short-term trend is bearish, but it still has investment value in the long term. Investors need to cautiously assess risks and allocate assets reasonably. Stay calm during market panic and remain rational during market greed to achieve long-term gains in the crypto market.
The universe is uncertain, and we are all dark horses!
[Risk Warning] Contract trading is highly risky, and investments should be made cautiously. This article is for market analysis only and does not constitute investment advice.
