The cryptocurrency landscape experienced a tumultuous upheaval on Monday, resulting in a staggering $500 million in liquidations that left traders on edge, predominantly impacting Bitcoin (BTC) and Ethereum (ETH).
Data from CoinGlass revealed that more than 115,000 traders were affected as Bitcoin dipped below $115,000 while Ethereum approached the precarious $4,200 mark. This downturn was exacerbated by excessive leverage in the market, triggering a chain reaction of forced sell-offs on multiple platforms.
In just a matter of hours, Bitcoin’s value plummeted by over $3,000, dragging several significant altcoins down with it. Ethereum saw a nearly 5% drop, while Solana (SOL) and Dogecoin (DOGE) both faced declines in the range of 4-5%.
XRP also came under pressure, testing the crucial $3 support level, highlighting the vulnerability that permeated the market. Interestingly, Chainlink (LINK) managed to break the trend with a remarkable 5% gain despite the surrounding chaos.
The Risk for Ethereum at the Liquidation Threshold
Ethereum’s situation appears precarious, especially if its price dips below the $4,200 threshold. Insights from Hyperdash indicate that approximately 56,000 ETH long positions, valued at around $236 million, are susceptible to liquidation around $4,170.
There are also significant liquidation clusters positioned at the $3,940 level and within the $2,150–$2,160 range, which could exacerbate market volatility if breached.
Andrew Kang, the founder of Mechanism Capital, cautioned that should the liquidation surge persist, ETH might plummet to as low as $3,600. He pointed out that total liquidations of ETH across exchanges could hit $5 billion, possibly driving prices down further before any stabilization occurs.
Whales Accumulating Bitcoin or Market Collapse?
In the wake of the sharp downturn, some analysts speculate that this event may herald a phase of whale accumulation.
Crypto analyst CrypNuevo highlighted that Bitcoin hit a new all-time high before facing a sudden $1 billion liquidation event, a tactic he believes was likely aimed at shaking out retail investors. He insinuated that significant players in the market might have absorbed the selling pressure, indicating increased institutional interest at lower price points.
Should whale accumulation prove accurate, this dip might act as a launching pad for the next upward movement once over-leveraged positions are unwound and the selling pressure dissipates. Nonetheless, given the prevailing geopolitical uncertainties and fragile support levels, traders are advised to proceed with caution.
The next few days will be crucial in determining whether Bitcoin can regain stability above $115,000 and whether Ethereum can maintain its position above $4,200, or if further liquidation waves will drag the market deeper into correction.
Visualizations sourced from ChatGPT, with ETHUSD chart references from TradingView.
