ETH After the Liquidation Cliff: Sell the Bounce Into $1,900–$2,000 Resistance

Market regime & context (multi-timeframe)

1) Data quality & what we can infer

• You provided daily candles from 2025-11-09 → 2026-02-04, plus intraday (hourly) for 2026-02-05 → 2026-02-06 00:08.
• The 2026-02-05 daily candle is null, but the hourly series shows the full day’s selloff, so we can still analyze the move.
• Current print: $1,819.06 (00:08 UTC).

2) Dominant trend (daily)

• ETH has been in a strong downtrend since mid-January:
  • ~$3,350 (Jan 14) → $2,935 (Jan 20) → $2,445 (Jan 31) → $2,268 (Feb 1) → $2,144 (Feb 4) → $1,819 (now).
• This is a classic impulsive selloff (large red candles, expanding ranges) indicating risk-off flow and/or liquidation.

Conclusion (trend): Primary trend is decisively bearish; counter-trend bounces are likely to be sold unless key reclaim levels break.

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Volatility, momentum, and liquidation signatures

3) Range expansion / volatility

• The drop from Feb 4 close ~2143.50 to current ~1819.06 is about -15% in ~1 day.
• Hourly candles show a waterfall from ~2145 down to ~1866 by hour 20, and then continuation toward ~1800.

Interpretation: This is consistent with forced deleveraging (liquidation cascade). After such events, markets often:

1. attempt a reflex bounce (short covering + bargain bids), then
2. retest / drift lower if broader trend remains bearish.

4) Volume/participation

• The most recent daily-like print (2026-02-06 00:08) shows very large volume (~62B).
• High volume into a sharp selloff can mean capitulation, but it can also mean distribution + liquidation with only a temporary floor.

Interpretation: Increased odds of a bounce, but not enough evidence of a durable reversal yet.

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Price structure: support/resistance mapping

5) Immediate support zone (intraday)

From the hourly tape:

• Lows printed around $1,818–$1,799 (notably 00:00 candle low ~1799.38).
• Current is hovering just above that.

Support 1: $1,800 ± 15 (1790–1815 micro-zone)

If this breaks cleanly, downside air pocket risk increases.

6) Overhead resistance (where shorts may reload)

Key levels derived from prior hourly pivots:

• $1,875 (hour 22 high ~1875.77)
• $1,900 (hour 21 high ~1900.80)
• $1,950–$2,000 (multiple pivots: ~1951–1993, ~2008 high)
• $2,050–$2,100 (earlier intraday consolidation)
• $2,145–$2,165 (pre-drop region / breakdown origin)

Most important “sell-the-bounce” zone: $1,900–$1,975

Reason: it’s the first dense cluster of broken intraday supports, likely to act as resistance.

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Pattern and market microstructure read

7) Breakdown & retest logic

• ETH broke down from the ~$2,050–$2,100 area, then accelerated.
• After a liquidation leg, price often mean reverts toward the first major breakdown shelf (here: ~1900–2000), but in a bearish regime it often fails there.

Base case (next 24h): a bounce attempt into resistance, followed by lower highs and renewed selling pressure.

8) Gap/void behavior

• The move from ~1920 → 1866 → 1844 → 1806 was fast, leaving little acceptance.
• Such “price voids” are frequently revisited intraday, but not necessarily exceeded.

Implication: A revisit toward 1865–1900 is plausible without changing the bearish bias.

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Indicator-style conclusions (qualitative, from OHLC behavior)

9) Moving averages (inference)

Given the multi-week decline from 3300s to low 2000s to now 1800s:

• Price is almost certainly below 20/50/200-day MAs.
• MA slope would be down, implying rallies are counter-trend.

10) RSI / momentum (inference)

The magnitude and speed of the drop strongly suggest:

• Daily RSI likely oversold (or near it).
• Oversold does not mean “buy”—it means bounce risk is elevated (dangerous for late shorts), but trend still dominates.

11) Bollinger band behavior (inference)

A sharp selloff typically rides the lower band with band expansion.

• This supports a volatile chop + bounce attempts scenario rather than immediate smooth reversal.

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24-hour forecast (probabilistic)

Expected path (most likely)

1. Stabilization above ~1800 (buyers defend the round number).
2. Relief bounce toward 1865–1900.
3. Failure to reclaim ~1950–2000 leads to renewed selling, with a risk of revisiting 1800.

Scenarios

• Bearish continuation (55%): bounce to 1875–1925, then fade back toward 1800 and potentially 1775–1750.
• Range / consolidation (30%): 1790–1900 chop as market digests liquidation.
• Stronger mean-reversion (15%): squeeze to 1950–2050 if shorts overcrowd and spot bids step in; still counter-trend unless it holds above 2050+.

Net: bias remains down for the next 24 hours despite bounce risk.

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Trading decision (tactical)

Why Sell (short) is favored

• Dominant daily downtrend and broken structure.
• Strong overhead resistance stack at 1900–2000.
• Current level is sitting on support; selling here is poor R:R because of bounce risk.

Optimal entry concept

• Prefer shorting a rebound into resistance (sell-the-bounce), not shorting the hole.

Entry zone: $1,920–$1,970 (best), with a single suggested open price below.

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Risk notes (important)

• After liquidation events, wicks and squeezes are common. If price impulsively reclaims and holds above ~$2,000, the short thesis weakens quickly.
• This is a 24h tactical view, not an investment thesis.