The Christmas countdown encounters Ethereum's violent long wick candle, as the crypto market faces a critical moment at the end of the year.

Do you remember those 12 minutes? ETH plummeted from $2983 to $2901, a shocking drop. Although there was a rebound afterward, the ensuing volatility was even more fierce, now fluctuating around $3020. Originally, Christmas week was supposed to be a quiet trading period, but the global macroeconomic policy changes, the drastic variations in liquidity, and the fierce struggle at technical levels turned this week into the biggest psychological battlefield in the market. On one side, there is relentless pressure to take profits, and on the other side, there are cries for a technical rebound.

The key is still in the macro aspect. The hawkish signals from the Federal Reserve are coming one after another - Cleveland Fed President Mester and New York Fed President Williams are both emphasizing "keeping interest rates high for a longer time." A loosening cycle in early 2025? Forget it. Long-term high interest rates are draining liquidity, which is being squeezed tightly, and high-risk assets like Ethereum are the first to be hit.

The situation is even more severe with the Bank of Japan. The aftereffects of interest rate hikes have yet to dissipate, and the yield on 10-year government bonds has already soared to a new high since 1999. This development has directly rewritten global dollar liquidity expectations, causing risk asset sentiment to plummet. CICC's prediction is even more disheartening — Japan may have 1 to 2 more rate hikes before 2026.