Bitcoin News Today: Bitcoin's Leverage Boilover Spawns $100M in Liquidation Fallout

Generated by AI AgentCoin World
Friday, Aug 29, 2025 6:47 am ET2min read
Aime RobotAime Summary

- A $100M liquidation event hit crypto markets due to high leverage and volatile trading, with Bitcoin’s perpetual futures open interest hitting a 2-year high of $34B.

- Ethereum saw a "huge rotation" as 22,400 BTC converted to ETH, pushing its price above $4,950 and ETH/BTC ratio to 0.04.

- Institutional forecasts predict Bitcoin reaching $190K by Q3 2025 due to ETF demand and macro factors, while JPMorgan sees $126K by year-end based on volatility-adjusted valuations.

- Ethereum’s $4.96B exit queue and Bitcoin’s $110K support level highlight risks, as institutional adoption and regulatory shifts shape market dynamics.

A significant liquidation event shook the crypto market as $100 million in leveraged positions were wiped out in a single hour, according to recent market data. The rapid price shifts were attributed to increased leverage and volatile trading behavior, with Bitcoin’s perpetual futures open interest reaching a two-year high of over 310,000 BTC, or $34 billion, signaling a dangerous accumulation of leverage, per K33 Research. This surge occurred as the weekend saw a sharp 13,472 BTC acceleration in open interest, raising concerns about potential market corrections akin to previous summer liquidation cycles.

The liquidation event coincided with a notable movement in capital between

Bitcoin
and
Ethereum
. Over 22,400 BTC was converted into Ethereum via Hyperunit, contributing to Ethereum’s all-time high of over $4,950. This shift, described as a “huge rotation,” redirected market momentum toward Ethereum, as its ETH/BTC ratio surged above 0.04—a level not seen in 2025. Annualized funding rates also spiked from 3% to nearly 11%, highlighting aggressive long positions amid relatively stagnant price movements.

Ethereum’s exit queue has also drawn attention as over 1 million ETH (worth $4.96 billion) awaits withdrawal from the proof-of-stake network. Validator exit times have hit a record 18 days and 16 hours, with the volume potentially representing a large-scale sell pressure as Ether has surged 72% in the past three months. Analysts like Marcin Kazmierczak of RedStone argue that the exodus reflects healthy market dynamics, emphasizing that institutional capital inflows can easily absorb validator sales. Meanwhile, Ethereum’s growing role as a “liquidity magnet” is evident, with Ether futures open interest nearing $33 billion, suggesting strong institutional interest.

Bitcoin, on the other hand, faces a critical juncture. Institutional adoption and macroeconomic factors are shaping its trajectory. Tiger Research recently projected that Bitcoin could reach $190,000 by Q3 2025, citing record global liquidity, structural ETF demand, and new access to 401(k) retirement accounts.

JPMorgan
analysts also noted that Bitcoin’s current price is “too low” relative to gold, especially as its volatility has dropped to historic lows. Adjusted for volatility, the firm calculates a fair value of around $126,000 by year-end. The firm attributed this valuation to falling volatility, which reduces the risk-adjusted difference between Bitcoin and gold, currently at a record low ratio of 2.0.

Despite bullish forecasts, on-chain metrics suggest a market that is active but not yet overheated. Metrics like the MVRV-Z, ASOPR, and NUPL indicate moderate positioning, with profits not yet extreme. However, the market remains sensitive to liquidity shifts, with whale-driven selling dominating in the aftermath of recent price corrections. A $110,000 support level appears crucial, as a breakdown could expose further liquidation clusters near $104,000.

Institutional adoption and regulatory developments continue to play a pivotal role in shaping market sentiment. VanEck CEO Jan van Eck positioned Ethereum as the “Wall Street token,” citing its dominance in the stablecoin ecosystem and the Ethereum Virtual Machine’s role in supporting decentralized finance. With over $147 billion in stablecoins on Ethereum, the platform’s role in traditional finance is expected to expand, particularly as banks prepare to issue their own stablecoins under new legislation.

Source: [1] Bitcoin Headed to $190K on Institutional Wave, Research Firm Says (https://www.coindesk.com/markets/2025/08/29/bitcoin-headed-to-usd190k-on-institutional-wave-research-firm-says) [2] JPMorgan says current bitcoin price 'too low,' sees upside to $126,000 by year end (https://www.theblock.co/post/368653/jpmorgan-says-current-bitcoin-price-too-low-sees-upside-to-126000-by-year-end) [3] Ethereum exit queue hits Record $5B ETH, raising Sell Pressure Concerns (https://cointelegraph.com/news/ethereum-exit-queue-record-5b-eth-sell-pressure-concerns) [4] Ethereum is the 'Wall Street token,' says VanEck CEO (https://www.dlnews.com/articles/markets/ethereum-is-the-wall-street-token-says-vaneck-ceo/) [5] Bitcoin trend reversal to $118K or another drop to $105K (https://cointelegraph.com/news/bitcoin-trend-reversal-to-118k-or-another-drop-to-105k-which-comes-first) [6] Bitcoin Faces Liquidation Risk as Leverage Hits Two-Year High (https://coinmarketcap.com/academy/article/bitcoin-faces-liquidation-risk-as-leverage-hits-two-year-high) [7] Liquidations (https://www.coindesk.com/tag/liquidations)