Ethereum (ETH) Short-term Trading Strategy Weekly Report: Key Price Level Battles and Risk Control Plan

Summary of Key Points:
The market is currently at a critical crossroads, with the main contradiction revolving around the validity of the $2,900 support level. Above $3,300 is a decisive resistance confirming trend reversal. Strategically, we adopt a range-based approach of "primarily shorting high, deploying long positions at key supports," engaging in battles at technical key levels, and strictly managing position sizes.

I. Current Market Situation and Technical Structure

Based on the latest analysis as of December 17, 2025, Ethereum is in a typical "balance and choice" phase, with bulls and bears competing around several clear technical levels.

1. Core Support Zone (Bullish Defense Line): $2,900 - $2,920. Over the past two weeks, the price has been effectively supported three times in this zone and rebounded, indicating strong demand here. This zone is also the potential neckline of a head and shoulders top pattern; its success or failure will determine the short-term market direction.
2. Key Resistance Zone (Bearish Fortress): $3,280 - $3,300. ETH remains within a downward channel overall. Only if the daily closing price clearly and persistently closes above this zone can the downtrend be broken and a new upward space be opened.
3. Market Sentiment and Institutional Dynamics: On-chain data shows that recent selling pressure from institutional investors has weakened, and fund positions are improving, providing a potential foundation for price stabilization at key support levels.

II. Refined Trading Strategies and Execution Plans

The following strategies are based on the above technical structure, embedding your ideas into a clearer risk management framework.

Strategy 1: Rebound Short Strategy

· Core Logic: Follow the dominant downtrend channel, capturing high-probability short opportunities when the price rebounds to resistance zones.
· Ideal Entry Zone: $3,050 - $3,100. This area is near the recent oscillation upper boundary and resistance of the downtrend channel, offering a better rebound short point than current prices.
· Entry Reference: If the price cannot reach the ideal zone and shows signs of weakening on small timeframes (e.g., 1-hour/4-hour charts), such as long upper shadows or RSI bearish divergence, consider lightly shorting above $2,950.
· Stop Loss: Must be set. Place stop-loss above the entry price by $50-$80 or above the key resistance at $3,330.
· Take Profit Targets:
· First Target: $2,920 - $2,900 (testing core support).
· Second Target: If the price decisively breaks below $2,900 neckline, establishing a bearish pattern, target around $2,630.

Strategy 2: Key Support Long Strategy

· Core Logic: Take advantage of rebounds within the market’s core support zone; this is a contrarian trade requiring strict position and risk control.
· Entry Zones:
· Primary Zone: $2,900 - $2,910. Wait for the price to test this core zone again and show clear bullish reversal candles such as bullish engulfing or hammer on the 15-minute or 1-hour chart before entering.
· Alternative Zone: $2,795 - $2,820. This is the late November low and previous important consolidation platform, with strong support potential. However, if the price falls here, it indicates market weakness, and wait for more confirmed stabilization signals.
· Absolute Risk Control Principle: "No stop-loss" is a destructive trading habit; must be abandoned. All long positions must have stop-losses.
· Enter near $2,900 with stop-loss at $2,880 - $2,890 (below previous low).
· Enter near $2,800 with stop-loss at $2,780 (below previous low).
· Take Profit Targets:
· First Target: $3,000 - $3,050 (upper boundary of the oscillation range).
· Second Target: If the rebound is strong and breaks through $3,050, aim for around $3,250.

III. Core Risks and Position Management

1. Position Discipline: Your proposal of risking "2% of the principal per trade" is very prudent and professional; must be adhered to. This means, if your total trading capital is $100,000, the maximum risk per trade should not exceed $2,000.
2. Key Breakout Responses:
· Upward Breakout ($3,300): If the price breaks out with volume and closes above this level on the daily chart, all short strategies should be immediately paused. The market may turn bullish, targeting $3,500 - $3,650.
· Downward Break ($2,905): If the price closes below this level on the daily chart, a head and shoulders top pattern may be confirmed, and all bottom-fishing long ideas should be halted. The market will test lower supports.

IV. Future Scenario Analysis and Key Observation Points

To help you grasp the market pulse, here are three potential paths based on the current structure:

Bullish Scenario ( Probability: 30%)

· Trigger Conditions: Price remains supported above $2,900 and successfully breaks above $3,300 resistance.
· Market Implication: Trend reversal, a new upward rally begins.
· Trading Response: Exit all short positions, wait for a pullback to support at $3,200 - $3,250, then go long.

Bearish Scenario ( Probability: 40%)

· Trigger Conditions: Price effectively breaks below neckline support at $2,900 - $2,905.
· Market Implication: Head and shoulders top pattern confirmed, short-term downside opens.
· Trading Response: Abandon all bottom-fishing longs; rebounds become shorting opportunities, targeting around $2,630.

Neutral Consolidation Scenario ( Probability: 30%)

· Trigger Conditions: Price remains within a narrow range between $2,900 - $3,050.
· Market Implication: Bulls and bears continue to stalemate, awaiting external catalysts (macro news, BTC movement).
· Trading Response: Adopt a strict "buy high, sell low" range strategy, entering near the upper and lower boundaries, and cut losses decisively on reversals.

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In summary, the current market is at a critical technical decision point. The core of trading is "plan your trades and trade your plan." Be sure to execute according to the clear entry, stop-loss, and exit conditions above, avoiding emotional trading. Markets change rapidly; if you need to adjust dynamically based on the latest price action, feel free to provide current prices and patterns. $ETH