The market game behind ETH hovering around 2200 — Recent technical analysis and trading guide in the crypto space

Since early February, the cryptocurrency market has experienced a deep correction. Bitcoin has fallen from $71,500 to the current $67,370, and Ethereum has retreated from $2,130 to around $1,980. The logic behind this decline warrants in-depth analysis. According to the latest data, market sentiment indicators show 50% bearish, easing from extreme fear levels, but true reversal signals have yet to appear.

Market Status: From Extreme Fear to Cautious Observation

The market changes over the past week confirm the core rule in crypto—prices fluctuate around capital flows and sentiment. Bitcoin is currently at $67.37K, up 0.87% in 24 hours; Ethereum at $1.98K, up 1.47% in 24 hours. From this perspective, the market shows some rebound momentum, but whether this can continue depends on several key factors.

Technical data indicates Bitcoin’s critical support levels are:

• First support: $71,000 (corresponding to the platform for the November 2024 cycle)
• Second support: $70,000 (psychological threshold and previous low)
• Third support: $68,000 (strong support; breaking below may accelerate to $65,000)

Ethereum’s resistance around 2200 JPY remains in effect, with key supports at:

• First support: $2,070
• Second support: $2,050 (strong support; breaking below may test the $2,000 level)
• First resistance: $2,200 (former support now acting as resistance)

The repeated struggle around 2200 indicates institutional funds are still weighing risks, neither willing to continue shorting nor confident in long positions.

Layered Analysis of the Bearish Drive

Macro policy shifts are the fundamental driver behind this decline. The market has shifted from the early-year “rate cut expectations in March” to “no rate cuts throughout 2026,” even hinting at possible rate hikes. US ADP employment data added only 22,000 jobs (below the expected 48,000), which should have been bullish for crypto (implying economic weakness), but instead, the market is caught in a “recession + high interest rates” double concern. The high-rate environment depresses risk asset valuations, making high-volatility assets like crypto the preferred retreat for institutions.

Ongoing outflows of institutional funds further confirm this trend. The US spot Bitcoin ETF has experienced 12 consecutive days of net outflows, totaling over $4.8 billion, with BlackRock’s iBit seeing a daily outflow of $528 million at its peak. Whales holding over 1,000 BTC reduced holdings by 23,000 BTC in January (-12%) and transferred large amounts to exchanges for potential selling. This is not a technical correction but a rational risk-avoidance move by institutions.

Market liquidity deterioration amplifies volatility. Market makers withdraw collectively during volatility spikes, causing depth to drop over 32%, and small sell orders can trigger significant price swings. Such low liquidity environments are prone to waterfall declines.

Self-reinforcing sentiment mechanisms also play a role. The fear and greed index, although rebounding from 18 (extreme fear) to 50% bearish, still indicates a bearish market mood. Forced liquidations of leveraged longs create a “downward → margin call → further decline” death spiral, and pessimistic narratives on social media exacerbate retail panic selling.

Technical Deep Dive

Bitcoin’s daily chart clearly shows a breakdown. It has fallen below the MA50 (74,200) and MA100 (73,800), with MACD crossing downward, indicating strong bearish momentum. On the 4-hour chart, the Vegas double channel is opening downward, with lower highs on rebounds, forming a classic bearish trend—“lower lows, lower highs.”

At $67,370, the price is below the critical support of $68,000 but still has some room before reaching the strong support zone at $70,000–$71,000. If support holds and a bullish candle appears in this zone, a bullish divergence on the 4-hour timeframe could signal a reversal.

Ethereum’s performance around 2200 warrants close attention. ETH has hit a 9-month low, breaking below this key support, with repeated tests between $2,050–$2,070. The 4-hour chart shows a descending flag pattern, RSI at 32 (oversold), but lacking clear bullish divergence, indicating limited rebound strength. With the current price at $1,980, just below the $2,000 level, a breakdown here would target the next strong support.

Most altcoins have broken below the upward trendline since November 2024, indicating a systemic technical deterioration across the market, not isolated declines.

Strategic Planning for Different Investor Types

Short-term traders should remain cautious. It’s advisable to stay on the sidelines, avoid chasing highs, and not rush to bottom-fish. Consider opening small short positions only if rebounds reach key resistance levels with volume stagnation. For example, BTC at $73,500–$74,000 and ETH at $2,200–$2,220 could be entry zones (position size ≤2%). Stop-loss at BTC $74,800 and ETH $2,250; take profit at BTC $71,500–$71,000 and ETH $2,100–$2,070. Be especially alert to US jobless claims and Fed chair speeches, which could trigger volatility.

Mid-term investors should wait for clear stabilization signals. Entry criteria include BTC supported at $70,000–$71,000 or ETH at $2,050–$2,070, with 4-hour bullish divergence and volume increase. Consider staggered positions: first buy 2% on stabilization, add 2% on pullback confirmation, and 3% on breakout of resistance, keeping total exposure below 7%. Stop-loss at BTC $69,000 and ETH $2,000.

Long-term investors should follow dollar-cost averaging. When BTC drops 5% (e.g., from 72,000 to 68,400 to 64,980) or ETH drops 5% (from 2,120 to 2,014 to 1,913), invest 1%, maintaining total holdings ≤30%, and reserve 70% cash for further declines. This approach reduces average cost and avoids large single-entry risks.

Risk control core advice: zero leverage is mandatory. Current volatility is extreme, and leveraged trading risks liquidation. Keep individual positions under 10% and total exposure below 30%. Maintain ample cash reserves for black swan events. Most importantly, avoid bottom-fishing without clear signs of stabilization (volume increase + bullish divergence + capital inflow). Patience is smarter than impulsive bets.

Key Data Releases and Response Plans

Federal Reserve Chair Powell’s upcoming speech will provide critical policy signals. Market reactions vary based on data:

If initial jobless claims are below expectations (<208,000), confirming economic resilience, it’s bearish for crypto, possibly leading to further declines. Strategy: stay on the sidelines or short on rebounds, targeting BTC $71,000 and ETH $2,070.

If data meets expectations (210,000–214,000), market response is limited; maintain a wait-and-see approach, avoiding premature moves.

If above expectations (>216,000), signaling economic weakness, it’s bullish for crypto, possibly triggering a rebound. Consider light long positions with targets at BTC $72,000–$72,500 and ETH $2,120–$2,150, with stops set 5% below support levels.

Bottom Formation Monitoring Indicators

Bottoms are typically zones, not points. Confirming a true bottom requires signals from four dimensions:

Price signals: BTC must hold support at $70,000 or $68,000 with volume ≥1.5× the 20-day average. A simple dip-and-rebound without volume doesn’t confirm stabilization.

Technical signals: 4-hour bullish divergence (RSI and MACD turning up) and breakout of downtrend lines suggest potential reversal.

Fundamental signals: ETF capital flows turning positive, whale addresses stopping net selling and starting accumulation, on-chain data confirming large funds are bottoming.

Sentiment signals: Fear and greed index rising for three days and surpassing 25 indicate market mood recovery. A shift from 50% bearish to more neutral levels is significant.

Liquidation signals: Total liquidations decreasing and long-short ratios balancing suggest extreme behaviors are subsiding, and the market is healing.

Overall Outlook and Near-term Expectations

Currently, the crypto space is in a bearish dominance but with waning momentum. At $67,370 for BTC and $1,980 for ETH, the market has likely completed initial lows, but a true reversal has not yet materialized. Patience is key—avoid panic selling on dips and resist impulsive buying on rebounds.

ETH’s resistance around 2200 may persist short-term, but a confirmed breakout and stabilization would signal bullish strength. Similarly, if Bitcoin stabilizes in the $70,000–$71,000 zone, bearish pressure will weaken.

Next week’s focus includes Fed chair Powell’s speech and initial jobless claims, which will influence whether the market continues to decline or begins to rebound. Until then, cautious, light positioning remains the most rational approach.

Overall trading advice: mainly light positions, cautious shorts, and wait for clear bottom signals before scaling in. The end of this correction won’t come immediately, but opportunities often hide at the deepest lows.