The cryptography market was faced with a brutal correction on Monday, with nearly $ 500 million in liquidations that shake traders from Bitcoin (BTC) and Ethereum (ETH).
According to Coinglass data, more than 115,000 merchants were liquidated while Bitcoin slipped to $ 115,000 and Ethereum plunged to the danger zone of $ 4,200. The waterfall was fed by exposure to a high lever effect, creating a domino effect of forced sales between exchanges.
The clear drop in Bitcoin has erased more than $ 3,000 in value in a few hours, drawing major altcoins in the red. The ETH fell by almost 5%, while Solana (soil) and Dogecoin (Doge) fell each from 4 to 5%.
XRP tested the level of critical support at $ 3, stressing the market level fragility. Interestingly, ChainLink (Link) has shaken up the trend, displaying a daily gain of 5% despite the turmoil.
Ethereum faces a liquidation cliff
Ethereum seems particularly vulnerable if its price breaks down below $ 4,200. Hyperdash data show that more than 56,000 ETH length positions, worth around $ 236 million, is at risk of liquidation almost $ 4,170.
Additional liquidation clusters are positioned around $ 3,940 and $ 2,150 to $ 2,160, levels that could amplify volatility if they are triggered.
Andrew Kang, founder of Mechanism Capital, warned that ETH could fall as low as $ 3,600 if the liquidation cascade continues. He added that the liquidations of overall eTH through the scholarships could reach $ 5 billion, which could lead to even lower prices before stabilizing.
ETH's price losing momentum on the daily chart. Source: ETHUSD on Tradingview
Accumulation of bitcoin whales or general market ventilation?
Despite the sale, some analysts argue that the accident could set up an whale accumulation phase.
Crypto Crypto analyst noted that Bitcoin had recently printed a new summit of all time before a sudden liquidation event of $ 1 billion, a decision which, according to him, was designed to eliminate retail merchants. He suggested that a whale has absorbed a large part of the forced sale, indicating that institutional players can pick up BTC at reduced prices.
If the whales are actually accumulating, the DIP could serve as a springboard for the next rally once the leverages are reset and the sale pressure is assimilated. However, with geopolitical uncertainty and fragile support levels, traders should remain cautious.
The next few days will determine whether Bitcoin stabilizes above $ 115,000 and Ethereum holds $ 4,200, or if another wave of liquidation leads to the market more deeply in the correction.
Cover the image of Chatgpt, Ethusd Chart of TradingView
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