Macro liquidity freeze and stagflation shadow perspective: How is the Ethereum market?

To maintain absolute sanity in this kind of waterfall that has a visual intimidation effect and is extremely easy to induce the impulse of retail investors to cut their flesh, we must first completely peel off the noise of the Ethereum ecological narrative and face the underlying macro source of this plunge. The current price of US$2,039.77 is not just a failure of technical support. It is an instinctive reaction of global risk assets to the expected deterioration of US dollar liquidity.

The current surge in crude oil caused by the war in the Middle East has injected the most powerful adrenaline into inflation. The Fed’s internal calculation of interest rate hikes is moving from the fringe to the mainstream, and the rise in U.S. dollar real interest rates has created an extremely terrifying valuation black hole. As a highly elastic on-chain financial asset, Ethereum’s underlying risk-free interest rate anchor is undergoing violent fluctuations.

When the traditional safe-haven asset gold began to fluctuate at high levels, crypto-assets completely lost their digital hedging narrative in the short term. Judging from the technical resonance of this macro liquidity exhaustion expectation and the geological black swan, to answer the core question of how the Ethereum market is doing, the objective conclusion is that its macro upward physical power has been completely exhausted. Before the Federal Reserve releases its easing signal again, any weak rebound in the market is just a bullish trap serving the main change of hands during the decline.

50.89 million bulls became macro sacrifices to reveal the market situation of Ethereum

One of the core indicators for assessing the true destructive power of macro bearishness on Ethereum is the extreme difference between the leverage clearing ratio in the derivatives market and the time for unilateral massacre. Today, Ethereum’s one-way long-killing data of more than 50 million yuan directly provides a physical explanation of how the main force uses the macro negative to launch a deleveraging massacre.

In the past 24 hours, ETH has completely lost its ability to defend against high levels, with a single-day decline of 1.78%. Accompanied by this, long positions in the derivatives market that were trying to buck the trend have stopped growing. Data shows that the total amount of contract liquidation across the entire network reached 62.2163 million yuan. In this huge cleaning pool, long orders occupied an absolute dominant position, and long positions as high as 50.8991 million yuan were wiped out when the positions were broken.

The real brutal killing is hidden in the microscopic slices of the last 4 hours. Even though the price has broken through $2,100, the dip bulls are still like moths to the flame. Of the liquidated positions totaling RMB 6.8742 million in four hours, long orders accounted for 6.1726 million, while short orders accounted for only 701,500. The proportion of bulls being slaughtered remains at more than ten times! This shows that the main force is using the Yin fall to cooperate with the pin, and high-frequency harvest those short-term bulls who are trying to catch the flying knife halfway up the mountain. Once you understand the cruel nature of killing more and killing more under macro pressure, you will be able to understand the danger behind it more clearly.

Retail investors will die due to crowding in 2.53 and the defensive solution of Giant Whale 1.11 will follow.

If the microscopic position liquidation data is a sickle for the main force to harvest, then the serious deviation of the long-short ratio data directly exposes the completely different strategic trump cards of the long and short sides in the current market when facing macro critical attacks. This is the most practical and objective radar to determine whether the plunge has bottomed out.

The data panel shows extremely nakedly the extreme slowness and fatal paranoia of retail investors in the face of macro crises. Currently, on the Binance platform, the long-short ratio of ordinary retail accounts has soared to an extremely crowded state of 2.5386 in an extremely abnormal manner, and the long-short ratio of retail investors on the OKX platform is also as high as 2.56. Even the long-short ratio of Binance’s large investors, which represents high-net-worth large-capital retail investors, has reached a crazy bullish state of 2.7994.

What do these three sets of data mean? This means that at the bottom of the abyss of $2,039, the vast majority of retail investors and large investors in the entire network did not pay attention to macro risks at all. The number of people who are bullish and start buying the bottom is more than 2.5 times the number of bearish. Not only was the bullish position of retail investors not alleviated by the plunge, but it became extremely overloaded by extremely blind bargain hunting.

However, the main funds with real macro vision have given extremely cold-blooded defensive cards. In terms of the long-short position ratio of Binance’s top traders, which represents the real amount of funds, the value has shrunk to an absolute defensive level of 1.1196. This extreme deviation of retail investors frantically buying the bottom and giant whales retreating to avoid risks provides an extremely cruel answer to the subsequent trend of Ethereum: as long as retail investors remain crowded and long at 2.53 times, the main force will never be able to spend huge sums of money to rescue these bargain hunters. The market will definitely continue to fall or hit the market again with extreme violence, completely uprooting the leverage of these retail investors.

46.4 billion daily volume and futures deviation and practical geek risk control guide

Combining the above-mentioned underlying game data with the Fed's macroeconomic tone, we see an extremely high-risk ecosystem that is completely shrouded in the shadow of high interest rates and is extremely crowded with retail bulls. The spot transaction volume of the entire Ethereum network is only 2.801 billion yuan, while the contract transaction volume is as high as a breathtaking 46.433 billion yuan. The futures transaction ratio of nearly 17 times is irrefutable evidence that the current situation is completely caused by the high-frequency mutual entanglement of the derivatives market in panic selling and blind retail investors. Contract positions across the entire network remain at a high of 29.616 billion yuan, like a barrier lake hanging overhead.

Faced with this extreme market situation in which macro liquidity is expected to freeze, retail investors are taking over, main players are cold-bloodedly retreating, and positions remain high, regarding the core pain point of the Ethereum market, it is recommended that all geek traders immediately switch to the highest level of defensive mode:

The first step is to absolutely, resolutely and unconditionally prohibit the use of any leverage at the current position for bottom buying on the left. In an abnormal environment where the long-short ratio of retail investors is as high as 2.53, do not use your own capital to fight against the sickle of the main force.