Bitcoin flash crash has sent shockwaves through the crypto market, resulting in over $550 million in liquidations and signaling a possible momentum shift toward Ethereum.
Over the weekend, Bitcoin (BTC) saw a dramatic tumble below $111,000 when a major holder offloaded 24,000 BTC—valued at more than $300 million at the time—into an illiquid market. The rapid transfer was directed entirely to the Hyperunite platform, with half of it occurring on Sunday, effectively wiping out the bullish gain Bitcoin had seen after Federal Reserve Chair Jerome Powell’s speech on Friday.
This abrupt drop triggered a cascade of forced liquidations, totaling $238 million in Bitcoin positions and another $216 million related to Ether (ETH). Combined, more than $550 million in leveraged trades were wiped out within a 24-hour period. After briefly plunging to below $111,000, Bitcoin found support and rebounded slightly to trade around $112,800 by early Monday trading sessions in Asia.
Understanding Liquidations and Market Fragility
The weekend’s sharp correction highlighted just how precarious leverage-based trading remains in the cryptocurrency space. When markets turn sharply, leveraged trades are forcibly closed by exchanges, adding more downward pressure to already fast-declining prices. These liquidation cycles often function as a reset button, clearing out speculative excess and sometimes setting the stage for a more stable rebound.
While Bitcoin bore the brunt of the drop, Ether fared considerably better. ETH managed to maintain an upward momentum, currently trading at $4,707—up 9% over the past week—suggesting a shift in investor focus.
Institutional Shift Toward Ethereum
Analysts are interpreting this divergence as a sign that institutional investors might be reallocating funds from Bitcoin to Ethereum, anticipating that a future interest rate cut from the Federal Reserve would benefit Ethereum more due to its relatively smaller market capitalization.
Jeff Mei, COO at BTSE, noted, “Ethereum continued to soar thanks to the continued attention from DATs. The BTC/ETH ratio has rebounded back to technically interesting levels.”
Echoing this view, SignalPlus executive Augustine Fan reported a structural change in demand dynamics. “ETH derivatives and tokenized asset flows are gaining relative to bitcoin,” he commented via Telegram, implying that traders are increasingly favoring Ethereum as institutional buying picks up.
Fan also pointed to expanding interest in altcoins like Solana and Dogecoin, which are now benefiting from investors seeking higher returns outside of Bitcoin.
Ethereum’s Market Maturity and Macro Tailwinds
Experts stress that Ethereum’s rise isn’t just driven by macroeconomic factors. Long-term bets, including institutional treasury allocations, suggest deeper confidence in Ethereum’s long-term utility. Samir Kerbage, Chief Investment Officer at Hashdex, emphasized Ethereum’s potential during an email exchange over the weekend.
“Ether’s new all-time high is a clear sign of investor demand beyond just bitcoin,” Kerbage said, referencing a broader shift in sentiment. Previously bold targets, such as Ethereum reaching $10,000, now seem increasingly feasible as the asset cements its role in powering stablecoins, asset tokenization, and smart contracts, especially among traditional financial players.
The year-to-date performance has further validated this outlook. Ethereum has surged by 45% so far this year, cementing its position as a key player in the digital finance space.
For more insights: Bitcoin Reverses Powell Spike With a Flash Crash as Options Market Signals Jitters Ahead
Chart illustrating Bitcoin’s sudden price plunge and resulting liquidations over the weekend.
