Bitcoin and Ethereum, the two largest cryptocurrencies, are experiencing a steep market downturn, sending shockwaves across the crypto space. Over the past 24 hours, Bitcoin has dropped below $88,000, while Ethereum has plunged to $2,373, marking an 8% and 11.5% decline, respectively.
The price drop has resulted in billions in liquidations across centralized and decentralized exchanges. On-chain data suggests increased selling pressure from whales and institutional investors, adding to market uncertainty. With macroeconomic concerns and ongoing regulatory scrutiny, many traders are now questioning whether this correction is a temporary setback or the start of a prolonged bear market.
Bitcoin’s Drop To $88K, Breaking Key Support Levels
Bitcoin has struggled to maintain its psychological support at $90,000, slipping to $88K following increased sell-offs. Analysts highlight multiple factors behind this decline:
- Whale Sell-Offs: On-chain data shows significant BTC deposits to exchanges, signaling potential selling pressure.
- ETF Outflows: BlackRock’s IBIT ETF recorded a $332.6 million single-day outflow, the highest since its launch.
- Macroeconomic Uncertainty: Risk-off sentiment in global equities and fears of continued interest rate hikes have dampened investor confidence.
The latest decline also brings Bitcoin closer to its next critical support level at $85,000. BTC could test lower support zones around $80,000 if the selling continues.
“Bitcoin’s failure to hold above $90K suggests further downside risk in the short term,” noted Matthew Hyland, an independent crypto analyst.
Ethereum Nears Key Liquidation Levels as Price Falls Below $2,400
Ethereum has been hit even harder, with its price dropping 11.5% to $2,373 in the past 24 hours. This decline has put over $340 million in MakerDAO collateral at risk of liquidation if ETH falls another 19%.
Based on analytical predictions, major Liquidation Price Levels are $1,926, $1,842 and$1,793
These levels are critical, as hitting them could trigger a liquidation cascade across DeFi lending platforms, further exacerbating the sell-off. Already, $296 million in ETH positions have been liquidated on centralized exchanges, according to CoinGlass.
“A breach below $2,000 could set off further liquidations, deepening ETH’s decline,” warned DeFi strategist Rachel Lin of SynFutures.
Ethereum’s network activity has also declined, with fewer transactions and lower DeFi engagement, adding to bearish sentiment.
Whale Movements & Institutional Selling Fuel Market Volatility
Whale transactions and institutional outflows have played a key role in the recent market downturn.
- BTC Exchange Deposits Increase: Large Bitcoin holders have moved over 15,000 BTC (~$1.32 billion) to exchanges, signaling potential selling pressure.
- ETH Withdrawals Surge: Despite ETH’s decline, Ethereum whales have withdrawn over 600,000 ETH (~$1.43 billion), suggesting long-term accumulation.
- Stablecoin Inflows Rise: An increase in USDT and USDC deposits to exchanges suggests that some investors are waiting to buy at lower prices.
“When whales move large amounts of BTC and ETH, it often signals upcoming volatility,” explained Glassnode analyst Jessica Wu.
Could This Be a Major Market Reset?
Some analysts argue that the current market decline mirrors historical bull market corrections, where assets dip 25-30% before rebounding to new highs. Bitcoin remains up 120% over the past year, and despite the correction, long-term fundamentals remain intact. Ethereum, meanwhile, continues to see strong institutional adoption, with Ethereum ETFs on the horizon.
“The next few weeks will determine if this is a healthy correction or the start of a broader downtrend,” said macro trader Alex Krüger.
Advertisement Banner
If the market stabilizes at current levels, traders could see a strong recovery in the coming months. However, a deeper decline could put Bitcoin at risk of falling toward $80,000 and Ethereum below $2,000.
Conclusion: Is This a Buying Opportunity or a Warning Sign?
Bitcoin and Ethereum’s sharp declines have sparked renewed uncertainty in the crypto market. With whale movements, ETF outflows, and macroeconomic concerns weighing on sentiment, short-term volatility is likely to persist.
If Ethereum’s liquidation levels are breached, it could trigger further downside pressure, while Bitcoin must hold support at $85,000 to prevent further losses. While historical bull markets have seen similar corrections, traders should remain cautious as the market navigates this turbulent phase.
The coming weeks will be crucial in deciding whether this dip is a temporary market shakeout or an early sign of a prolonged bear phase.
The BIT Journal is available around the clock, providing you with updated information about the state of the crypto world. Follow us on Twitter and LinkedIn, and join our Telegram channel.
FAQs
1. Why are Bitcoin and Ethereum prices dropping?
Bitcoin and Ethereum are declining due to increased whale sell-offs, ETF outflows, and macroeconomic uncertainty. Institutional investors have been reducing risk exposure, contributing to price weakness.
2. What is Ethereum’s liquidation risk?
Over $340 million in MakerDAO collateral is at risk if ETH falls below $1,900. A deeper drop could trigger a DeFi-wide liquidation cascade.
3. Is this a market correction or the start of a bear market?
Historical trends suggest this could be a bull market correction, as past cycles have seen 25-30% dips before recovery. However, if BTC drops below $85K, further downside risks remain.
4. Should traders buy Bitcoin and Ethereum now?
Some traders see liquidation-driven sell-offs as buying opportunities, but further downside is possible. Caution is advised, especially if macroeconomic conditions worsen.
Glossary
Liquidation: A forced sale of an asset when its value falls below a collateral threshold, triggering margin calls.
Deleveraging: A process where excessive leverage is removed from the market, often leading to sharp sell-offs.
ETF Outflows: When investors withdraw funds from exchange-traded funds (ETFs), reducing demand for the underlying asset.
Stablecoin Inflows: Large transfers of USDT or USDC to exchanges, often signaling traders preparing to buy assets.
On-Chain Analytics: The study of blockchain data to monitor transaction trends, exchange flows, and whale movements.
References
The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. The Bit Journal does not guarantee the accuracy, completeness, or reliability of any information provided in the price predictions, and we will not be held liable for any losses incurred as a result of relying on this information.
Investing in cryptocurrencies carries risks, including the risk of significant losses. Always invest responsibly and within your means.
For advertising inquiries, please email . [email protected] or Telegram
