#ETH Ethereum Technical Analysis

Technical Overview:
1. Weekly Level: Regarding candlestick patterns, last week’s candlestick price bottomed out and rebounded after reaching around 1750, closing with a hammer-shaped shadow, with 1750 being a recent key support level. The first resistance above is near the horizontal neckline + ice line: around 2120, providing the first short-term resistance.

In terms of candlestick momentum, the continuous three bearish candles from a high near 3400 to 1750 indicate that the bearish momentum is in the “main downtrend” phase. Generally, after a main downtrend, wide-range oscillation and adjustment are needed. Even a violent rebound requires a bottoming structure. Referencing August 2024, after three consecutive bearish candles, the price formed a long-term oscillation structure at the bottom, followed by a rebound.

Therefore, the weekly chart shows that the downtrend has just ended, with support at the bottom. It will oscillate and shake between support and resistance. The upper horizontal resistance can be used for high sell and low buy oscillation strategies. Currently, the market is on the left side of the oscillation, and the overall oscillation structure still needs to wait for further development.

2. Three reasons why the bottom will undergo oscillation and shakeout:
(1) First, the options positioning still leans towards bearish. At the end of February, the largest put options are concentrated between $50,000 and $60,000, which is a forward-looking signal embedded in the market’s implied probabilities, not a lagging sentiment.
(2) Second, derivative signals remain fragile. Extreme skewness, recent frequent negative funding rates, and inverted volatility structures are more consistent with a “relief rally” under fear-driven systems rather than a trend reversal.
(3) Third, ETF flow data shows continuous outflows. As of February 5, Bitcoin ETF’s monthly net outflow has reached $690 million. Although inflows have recently picked up, the current pattern indicates that institutional allocators have not shifted from “de-risking” to “re-engagement.”

3. Daily Level: The price on the candlestick chart rebounded to above the Fibonacci 0.236 + ice line resistance, forming ten consecutive doji candles. This is a warning signal, indicating a possible direct breakdown for a second bottom, or a short-term breakout to around 2380 near Fibonacci 0.382 resistance. The current bottom at 1750 has been confirmed. The challenge is waiting for the formation of specific high points. Traders can consider aggressive and conservative short positions at 2120, 2380, and other levels for betting on a decline. If 2120 drops directly for a second test, we are at the highest point for high sell and low buy. If the market breaks through further, stop-loss for aggressive shorts can be placed around 2380 for a conservative short position.

Similarly, if the price hits the bottom at 1750 support again and shows signs of breakdown or downward piercing, long positions can still be taken. The overall strategy is to perform high sell and low buy at the left side of the oscillation structure, confirming the high point for short positions at the top, and taking long positions for a second bottom at the low.

4. The Vegas indicator shows a death cross expectation, accompanied by the formation of a bottom oscillation structure. As the oscillation time lengthens, Vegas will form a death cross. Therefore, it can be confirmed that the current trend is a bottom confirmation rebound, but not a trend reversal.