ETH 1800→2140: Bear Market Short Squeeze Inducing Fake Rally, High Risk of Sharp Drop

Author: Trading Guru

1. Pattern Structure: Oversold Rebound, Not a Reversal

- The daily chart shows a bearish downward channel, with 1800 as short-term strong support, and a dense resistance zone at 2140 (previous oscillation upper boundary + 2150 integer level).
- The 4-hour chart shows consecutive bullish days, but the medium and long-term daily moving averages remain in a bearish alignment, indicating oversold technical correction without a reversal pattern.
- Indicators: The 4-hour RSI approaches the overbought zone at 70, and the daily MACD forms a bullish crossover below the zero line, signaling a weak rebound.

2. Capital Flows: Institutions Short-Term Bottom Fishing, Retail Chasing High

- Inflows: The US spot ETH ETF recorded a net inflow of $157 million on February 25, led by BlackRock and Fidelity, providing short-term momentum for the rebound.
- Outflows: Although exchange inflow volume has decreased by 90% from previous peaks, profit-taking and trapped positions at high levels are evident, raising doubts about ETF fund sustainability.
- Essence: Institutions are exploiting panic lows to accumulate, while retail investors follow the rally above 2100, forming a pattern of “Institutional Inducing Fake Rally, Retail Chasing In.”

3. Bear Market Short Squeeze: Typical Harvesting Script

- Background: The market is in a deep bear phase, with the Fear & Greed Index still in the “Extreme Fear” zone, and leveraged shorts crowded in.
- Logic: Major players push prices higher to trigger short stops, rapidly driving prices up and creating a false “reversal” illusion, attracting long positions.
- Features: Rapid ascent with moderate volume, lacking sustained incremental funds, characteristic of a bear market short squeeze rebound rather than a trend reversal.

4. Future Trend: Rise to Fall, Beware of Large C Wave Trigger at Any Time

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