The market in the past week has indeed caught many people off guard. The repeated expectations of Federal Reserve rate cuts directly pushed Ethereum from a high of $4,300 back down to around $3,000, trapping late buyers once again on the hillside. This wave of correction seems abrupt, but if you analyze the market logic, you'll find signs of this outcome were actually present early on.

**Macro Perspective: Rate Cut Expectations Were Overextended**

When Federal Reserve officials signaled that "there may be three rate cuts this year," the market reacted very quickly—Ethereum directly broke through $4,300. But there's a key detail: the 92% probability of rate cuts had already been priced in by the market, and the real bearish signal came from subsequent clarifications. Fed official Milan's remark that "there's no need for significant rate cuts next month" turned the January rate hold expectation from default to an 80% high probability.

History is always surprisingly similar. The 2019 rate cut cycle saw Bitcoin rise 25% before official actions, only to correct when the cuts actually happened. Ethereum's recent performance perfectly aligns with this rhythm—positive news was already priced in during the valuation phase, and the actual policy implementation instead signaled that the "good news was exhausted."

**Technical Perspective: Short-term Bearish Control**

From the daily chart, Ethereum has been fluctuating in the $3,000–$3,100 range for over a week, then the MACD formed a death cross, with the green histogram continuously expanding. The RSI indicator even dropped below 30 into oversold territory, which usually indicates a lack of momentum for a rebound. Multiple technical indicators are telling the same story: short-term upward momentum has already exhausted.

The key support level is at $2,800. If this level cannot hold, the next step down is $2,600. Although oversold conditions often suggest a rebound opportunity, in the current macro environment, any bounce may only be fleeting.

**Fundamental Perspective: Institutional Flows Warrant Caution**

There has been talk in the market that "institutions are aggressively buying Ethereum through ETFs," which sounds encouraging. But if you look closely at the actual fund data, the story becomes more complicated. BlackRock announced an Ethereum ETF last week, with a single-day outflow exceeding $100 million. With this level of selling pressure, retail buyers alone can't withstand it.

From this perspective, the so-called "institutional optimism" is somewhat hard to justify. When funds vote with their feet, they often tell the truest story more than any commentary.