Analysis of the Ethereum and Bitcoin Market Situation:
1. **Market Status**:
- Bitcoin (BTC) is currently some distance from its core support level of $85,000 to $88,000, while Ethereum (ETH) is nearing its last support level of $3,000 to $3,100.
- If Ethereum falls below the low of $3,014, it may drop directly to $2,400 to $2,600, forming a vacuum area, meaning there is no significant support until that price range.
2. **Ethereum's Market Performance**:
- Recently, Ethereum must show strength, especially as Bitcoin fluctuates downward to $85,000 to $88,000; Ethereum needs to fluctuate upward and establish an independent upward trend.
- If Ethereum fails to strengthen and simply follows Bitcoin's trend, it could trigger a deeper crash.
3. **Short Selling and Downside Risks**:
- “Short selling” and “downside risks” are two different concepts. Short selling is an investment strategy that anticipates asset prices will decline, profiting by borrowing assets, selling them, and then buying them back at a lower price.
- The risks of short selling include the possibility of unlimited losses, liquidity risk, and short squeeze risk. Theoretically, losses from short selling can be unlimited because there is no upper limit to how high asset prices can rise.
- Having physical assets to hedge short selling is feasible, but it is not recommended to short sell with all available funds, as this poses extremely high risks.
4. **Market Predictions**:
- According to the analyzed predictions, Ethereum has a bullish trend in 2024,
- The scalability of Ethereum and the potential approval of a spot cryptocurrency ETF by the U.S. Securities and Exchange Commission (SEC) are key factors influencing its price.
In summary, Ethereum is currently at a critical juncture, and its market performance is crucial to avoid a deep drop. At the same time, investors must be very cautious when considering short selling strategies, as short selling involves high risks, especially the risk of unlimited losses. Market predictions and technical analysis indicate that Ethereum has potential upside, but there are also regulatory uncertainties and scalability challenges. Investors should closely monitor market dynamics and develop reasonable investment strategies.$BTC
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