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ETH’s 35% Flash Crash: Controlled Liquidation or Market Manipulation?
The cryptocurrency market has been plagued by sudden and drastic price movements in recent times. The latest incident involves Ethereum, which suffered a 35% flash crash on February 3, leaving traders stunned and concerned about the underlying causes. As we dive into the details of this event, we can’t help but wonder: was this a controlled liquidation event or market manipulation?
At first glance, many experts believe that this sudden drop is unprecedented in the history of Ethereum’s price action. The magnitude of the crash raises serious questions about potential market manipulation or even a coordinated effort to dump Ethereum.
The sharp contrast between Bitcoin and Ethereum’s movements only adds fuel to these allegations. While Bitcoin remained relatively stable during the same time frame, Ethereum plummeted by an astonishing 35%. This disparity has led many traders to conclude that something is amiss in the Ethereum markets.
In light of this information, we believe it would be crucial to examine various factors before arriving at a conclusion. Firstly, let’s consider the recent events surrounding Ethereum. In December 2024, Ethereum struggled to break past $4,000, only to experience rejection and subsequently lose 40% of its value in just one month.
This failure triggered a decline that brought ETH back to a 966-day ascending support trend line. The price eventually rebounded and rallied above $2,450, which we believe has validated the strong support at $2,125.
However, technical indicators still suggest a bearish outlook for Ethereum’s future performance. Not only did the RSI drop below 50, but a bearish cross also formed on the MACD. These signals allude to further downside risk in the short-term.
The daily chart highlights a concerning pattern that we believe may indicate Ethereum is at an important crossroads. If this crash was indeed a controlled liquidation event, it would need to be considered against other market movements.
Moreover, a larger bearish trend could emerge if the price falls below $2,125 and continues downward toward $730.
Source: cryptonewsland.com
