The cryptocurrency market, which entered the week with a sharp surge, was shaken by the liquidation of nearly $10 million in leveraged positions. Bitcoin (BTC) and Ethereum (ETH) investors, in particular, experienced heavy losses, and market volatility became the most notable headline of the new week.
Ethereum in the spotlight, Bitcoin closely watched
According to Coinglass data, $320 million of total liquidations hit Ethereum investors, while $277 million occurred in Bitcoin positions. Additionally, approximately $90 million in additional losses were recorded in Solana (SOL), XRP, and Dogecoin (DOGE).
The price of ETH fell sharply from $4,700 to $4,400, while Bitcoin retreated to $110,200. Analysts indicate that this move was due to both overleveraged positions and weakness in the S&P 500. The sharp correction in ETH, in particular, created a knock-on effect as leveraged positions were liquidated.
Volatility Hits Record
Market data reveals a dramatic increase in volatility following the sharp market volatility. Bitcoin's daily volatility jumped from 15% to 38%, while Ethereum's rate rose from 41% to 70%. This pattern suggests a particularly fragile structure on the ETH side. The fact that leveraged positions were predominantly opened on ETH caused this asset to experience sharp declines during the correction.
A similar pattern prevails in the options markets. In both BTC and ETH, investors have been heavily focused on put options over the past two weeks. In other words, market participants are seeking protection against potential further declines.
According to experts, from a technical perspective, Bitcoin has signaled a negative signal by falling below its 100-day moving average, which it has held for a long time. Furthermore, the drop below the Ichimoku cloud has strengthened the short-term downtrend for BTC. According to analysts, critical supports for BTC are at $105,390 and $100,928.
While Ethereum remains above its 100-day moving average for now, rising volatility and the increasing hedging trend in the options market raise the possibility of a price pullback to $4,000. CME data shows a record level of short positions opened in ETH futures, reflecting the cautious stance of institutional investors.
Expectations for the coming days
Important developments are also on the horizon that will shape the markets on the macro front. US GDP data to be released on August 28th and employment figures to be released in early September could directly impact risk-on assets. According to Deribit data, the market is pricing a 35% probability of BTC testing $100,000 by the end of September, while the probability of ETH pulling back to $4,000 has increased to 55%. In short, while the liquidation of leveraged positions may provide short-term market relief, volatility remains high and risks, particularly on the Ethereum side, are more pronounced. The coming days will require investors to exercise increased caution, both in terms of technical levels and macro data.
