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The short-term rise of Ethereum has been too rapid, with overbought signals appearing on the technical front. Be cautious of pullbacks triggered by reversals in market sentiment. Adjust your position flexibly to avoid blindly chasing the price. In the long run, Ethereum still holds strategic value in areas like Decentralized Finance and Web3 due to its ecological advantages, but it is essential to maintain rational judgment amid the frenzy.
Speculative funds pouring in and market sentiment overheating
Institution and ETF Fund Driving: In 2025, Ethereum spot ETFs continue to see net inflows (such as over $700 million in a single day), coupled with Wall Street institutions accelerating allocations (such as SharpLink investing $200 million in ETH), creating a short-term "fund siphoning effect."
Emotional trading intensifies: Social media hype around topics like "ETH/BTC exchange rate breakthrough" and "new highs in Layer2 user numbers" drives the spread of FOMO (fear of missing out) sentiment, leading some investors to blindly chase the price.
Technical overbought signals appear
Divergence and Overbought Zone: After the current ETH price breaks through $4000, the RSI (Relative Strength Index) approaches the overbought threshold of 70, while the trading volume has not increased correspondingly, forming a "volume-price divergence."
Profit-taking pressure after breaking key resistance level: After ETH broke $4050, some early profit positions chose to take profits, resulting in increased short-term selling pressure.
Potential vulnerabilities of on-chain data and market structure
Exchange position volume plummets: ETH exchange balance drops to 4.9% of total supply (historical low of 4), which reduces selling pressure, but if the market turns to panic, liquidity may quickly shrink.
Derivative market leverage risk: The open interest reached $52.6 billion, with a high proportion of leveraged long positions, which may trigger a chain liquidation due to price pullback.