#ETH跌幅超5%

Cryptocurrency Market Plunge: Finding Rational Responses Amid Panic

June 4th, the crypto market continued its decline, with ETH dropping 5.58% in 24 hours, touching a low of $1,734 during the session, losing the key psychological level of $1,800; BTC also came under pressure, breaking below $63,000, with a low of $62,541. What further shook the market was that CoinGlass data showed total liquidations across the network reached $1.11B in 24 hours, with over 196k traders forced to liquidate, of which long positions accounted for more than 80%—a brutal shakeout at the expense of longs.

1. Trend Analysis: Cold Still Lingers, Dawn Is Still Far

1. The core driver of this round of plunge: Resonance of triple negative factors

This decline is not an isolated event but the result of multiple negative factors stacking and resonating:

Macro level: US inflation data rebounded, and expectations for Fed rate cuts continued to be delayed. As cryptocurrencies are highly sensitive to interest rates, tightening liquidity expectations directly led to accelerated capital withdrawal. Meanwhile, Middle East geopolitical conflicts escalated again, putting collective pressure on global risk assets, with Bitcoin briefly falling to its lowest since the Iran conflict erupted.

Institutional behavior: The world’s largest publicly traded Bitcoin holder, Strategy, made a rare sell-off move, which was seen by the market as a turning signal, accelerating the sell-off trend. CoinShares data showed that Bitcoin ETPs saw $1.43 billion outflows last week, the largest weekly outflow since 2026, while Ethereum also saw outflows of $257 million.

Internal market structure: A massive number of investors accumulated huge long positions above $2,000. As ETH declined from $2,100 downward, these leveraged positions triggered successive liquidations, forming a “decline—liquidation—increased decline” negative feedback spiral. The total liquidations across the network exceeded $1.78 billion, with ETH longs accounting for over 95%.

2. Technical Perspective: Key Support Broken, Bears Take the Lead

From a technical pattern, the market landscape has undergone a fundamental change:

For ETH, analysts previously emphasized that holding above $1,800 was crucial for maintaining any bullish outlook. ETH has now substantially broken this support, establishing a clear bearish trend technically. The next key support zone is around $1,700–$1,720. If this level also cannot hold, further downside could open up to the $1,500–$1,650 range—current market forecasts put the probability of ETH falling to $1,500 at 71%. ETH has already fallen about 60% from its August 2025 all-time high of $4,954, and on a monthly chart, it is at a critical crossroads.

For BTC, $63,000 is a key zone that saw heavy buying in February and March of this year. Losing this level will test the $62,000 support, and if it also breaks, $58,000 will become the next important support. On-chain fund flows show that BTC ETFs have been net outflows for 14 consecutive days, breaking the longest outflow record since December 2025, reflecting a clear pattern of “macro hedging + tactical reduction.”

3. Future Scenario Projections: Short-term Pressure, Medium-Long Term Depends on Macro “Temperature”

Short-term (1-2 weeks): The market is likely to oscillate between panic and technical rebounds. Oversold signals have appeared, so a short-term technical rebound is possible. However, given the market fear reflected by plunging positions and negative funding rates, the rebound space will likely be limited, with the $2,000–$2,020 zone becoming a tough resistance due to massive trapped positions.

Medium-term (1-3 months): The trend heavily depends on macro environment changes. If inflation data continues to surprise on the upside and the Fed maintains a hawkish stance, liquidity tightening will continue to suppress crypto valuations; conversely, if risk sentiment recovers and ETF funds flow back, the market could stage a phase bottom.

Long-term (end of year to 2030): Institutional opinions vary widely. Bloomberg Intelligence’s McGlone issued a strong technical sell signal, warning of up to 86% risk of Bitcoin plummeting; meanwhile, Standard Chartered remains optimistic, expecting ETH to reach $4,000 by 2026 and $40k by 2030, citing ongoing developments in stablecoin settlements and RWA tokenization.

2. Practical Strategies: Survive First in Extreme Conditions

1. Position diagnosis and adjustment—“Subtract first, then add”

In the face of a plunge, the first question isn’t “Should I buy the dip?” but to assess your current position and identify where you stand in this “liquidation chain”:

If holding high-leverage positions: No matter how optimistic you are about the future, you must face a harsh reality—the market’s short-term movement is not subject to personal wishes. The rapid decline in funding rates confirms that the pricing power is in the bears’ hands. Without safety cushions, holding on is akin to gambling. Rational choice now is to reduce positions or cut losses, at least bringing leverage below 3x before the market stabilizes.

If experiencing large unrealized losses but no leverage: Do not panic sell blindly. History repeatedly shows that panicked selling during extreme fear is often the worst move. Consider “lying flat,” reducing market monitoring, and waiting for emotions to settle before making decisions.

If holding cash and with a stable mindset: A window for medium- to long-term positioning may open after the sharp decline, but it’s not the time now. “Catching falling knives empty-handed” is a big trading taboo. True bottoms are usually the result of multiple conditions: declining volume, fear digestion, normalizing funding rates, and clear signs of stabilization on the right side. Patience is more valuable than reckless action.

2. Asset reallocation—shift from “heavy betting” to “defensive resilience”

Before trend clarity emerges, asset allocation should prioritize stability and defense:

Use BTC as the “ballast” of your crypto portfolio: In bear or sideways markets, Bitcoin’s liquidity and resilience outperform altcoins, making it an essential core holding. This cycle’s smaller decline compared to ETH and most altcoins further confirms this.

Focus on defensive assets: Platform tokens (like BNB) with real business backing tend to be more resilient; when signs of phase stabilization appear, Bitcoin ETFs can be a convenient tool to catch rebounds.

Timely shift into stablecoins, preserving “ammunition”: Drawing from professional investors’ experience during the February crash, converting some funds into stablecoins can lock in profits or reduce losses, while reserving “ammunition” for deploying at lower levels later.

Consider cross-asset allocation: The top priority now is survival in the crypto winter. As some investors advocate, “coin-stock dual cultivation”—during crypto pressure, pay attention to opportunities in traditional markets like US stocks related to AI and tokenization, using the differences among asset classes to optimize overall risk-return.

3. Specific Position Ratio Recommendations

Based on current risk levels, the following allocation scheme is suggested:

Asset Type | Recommended Ratio | Conditions
---|---|---
Stablecoins (cash equivalents) | 40%-50% | Keep as “ammunition” reserve, wait for right-side signals
Core BTC position | 25%-35% | Defensive anchor in crypto portfolio
Strategic ETH position | 10%-15% | Gradual accumulation, avoid heavy single buys
Other defensive assets (platform tokens, etc.) | 5%-10% | Moderate diversification, avoid overconcentration
High-volatility/leverage trading | 0% | Do not participate at this stage

Note: These are only guiding ideas. Each investor’s risk tolerance, capital situation, and holdings differ. Always make cautious decisions based on your own circumstances—avoid blindly following the crowd.

Conclusion: Pessimists are smart, optimists succeed, but only those who survive will witness

Every deep correction in the crypto market acts like a mirror, clearly reflecting each person’s risk management and awareness.

ETH halved from its $4,954 high and then fell nearly 60%, a painful and lengthy process. But from a longer-term perspective, Ethereum still holds structural advantages in key areas like stablecoin settlement, RWA tokenization, and AI-driven applications. Long-term optimistic forecasts from institutions like Standard Chartered are not unfounded.

But “long-term optimism” doesn’t mean ignoring short-term risks. Before a trend truly reverses, survival is the foundation of all gains. Controlling positions, holding cash, reducing leverage, and cultivating the right mindset are essential to gaining the initiative when the next cycle arrives.

Remember: The market is never short of profit opportunities; what’s missing is your ability to seize them when they come.