After years of watching the market, there are actually few trends that truly alert me. But today, the situation with Ethereum has sounded an alarm.

The repeated fluctuations around $3230 seem mild, but in reality, they are like a sword hanging over the heads of $800 million in short positions, any slight movement could trigger a chain liquidation.

First, let's look at the current situation: Ethereum's price is repeatedly testing around $3230, and the $3300 level is called the "life and death line." This is not alarmist; just look at the liquidation data—around this price level, there are $809 million in short positions stacked up, as dense as a discount sale at a market. On the flip side, the bulls are not in a good position either, with $1.053 billion in long positions below $3150. If broken, it could trigger a series of liquidations.

But there's a trick many people don't understand. Liquidation data is not just cold numbers; behind it is the exchange's ADL mechanism in action. When the price breaks through $3300 and a large number of short margins are forced to close due to insufficient funds, if the market cannot absorb these liquidations, the exchange will initiate auto-deleveraging—prioritizing the forced closure of the most profitable and highly leveraged short positions to fill the market gap. This is not simply "shorts losing money," but a system that kicks you out of the profit queue directly. This reaction generates a large amount of passive buy orders, instantly pushing the price up and creating a short squeeze.