Crypto Longs Crushed as $900M Liquidated, Ether Bears Brunt of Selloff
The crypto market endured a heavy reset to start the week, with nearly $900 million in leveraged longs liquidated as bitcoin (BTC $109,787.53) and ether (ETH) retreated alongside broader risk assets.
ETH accounted for the bulk of losses, with $320 million in forced unwinds, while bitcoin saw $277 million. Solana, XRP (XRP $2.9476), and Dogecoin (DOGE $0.2144) combined for another $90 million, per Coinglass. The shakeout coincided with ETH sliding from $4,700 to $4,400 and BTC dipping toward $110,200, mirroring an overnight drop in the S&P 500.
“This sharp move appears to be the result of overleveraged positioning, particularly following ETH’s recent run-up, and an overnight dip in the S&P 500,” Derixe.xyz wrote in a note.
Volatility spiked in response: BTC’s daily vol jumped from 15% to 38%, while ETH’s surged from 41% to 70%, Derive.xyz reported. Options markets turned defensive, with 25-delta skew flipping negative for both majors.
Traders are now focused on round-number levels. Odds of BTC revisiting $100,000 by September-end climbed to 35% (from 20% last week), while ETH holds a 55% chance of retesting $4,000. CME data points to record ETH shorts, reflecting hedging activity tied to tokenization flows and funding trades.
SignalPlus’ Augustine Fan noted: “BTC implied vol collapsed to record lows post-Powell, which was surprising, creating a sharp divergence against ETH’s still-rising IV.”
With GDP data due August 28 and jobs figures in early September, volatility is expected to persist — especially in ETH, where positioning remains more concentrated than in BTC.
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