As Friday's triple witching day (the expiration date of three types of financial derivations) approaches, the cryptocurrency market is facing significant fluctuation risk. The recent price rise of Ethereum has attracted many retail investors to chase the price, but the underlying settlement risks and bull traps may be brewing a chain reaction of falling markets.

Triple Witching Day refers to the phenomenon where stock index futures, stock index options, and single stock options all expire simultaneously on the third Friday of each quarter. Historical data shows that this time point has often triggered liquidity exhaustion, large-scale liquidations, and irrational price adjustments in traditional financial markets. As the connections between traditional finance and the digital asset market become increasingly close, the cryptocurrency market may also be impacted at this point.

There are several warning signals in the current upward trend of Ethereum:

First of all, the signs of overheating in long positions are obvious. The funding rate for ETH perpetual contracts has clearly turned positive, indicating that long positions are too crowded. Once the main funds choose to exit, the short squeeze effect may quickly amplify the fall.

Secondly, there is a divergence between on-chain activities and price trends. According to Glassnode data analysis, the number of on-chain transactions and active addresses for Ethereum has not significantly increased with the price rise, indicating that the current price increase may lack substantial buying support, and there is a phenomenon of trading volume being hollow.

From a technical perspective, ETH is currently close to the upper band of the monthly Bollinger Bands. The MACD indicator shows an initial death cross pattern. If the price cannot break through the resistance level of $2,600, it may quickly retreat to $2,200 or even lower.

In addition, the upcoming release of U.S. interest rate and inflation data is putting additional pressure on the market. These macro factors, combined with the special timing of the triple witching day, increase the likelihood of market fluctuations in the short term.

For investors, it is important to remain cautious in the current market environment, avoid blindly chasing the price, manage position risk reasonably, and closely monitor market liquidity and position changes around the three witching dates.