Bitcoin News Today: Bitcoin Flash Crash Unveils Market's Fragile Whale-Driven Illusions

Bitcoin’s price surged above $111,000 in recent trading activity, driven by a mix of macroeconomic optimism and institutional movements, but a sharp correction followed a large whale sell-off, sparking renewed volatility in the cryptocurrency market. The initial upward momentum came after Federal Reserve Chair Jerome Powell delivered a dovish speech at the Jackson Hole economic symposium, suggesting potential rate cuts could be on the horizon. This fueled a near 4% rally in Bitcoin’s price from $112,500 to $116,900, aligning with a broader risk-on tone across global equities and a weakening U.S. dollar index [1]. However, this bullish trend was abruptly reversed when a single whale reportedly offloaded 24,000 BTC—valued at over $300 million—into the market. The massive liquidation triggered a flash crash that saw Bitcoin plummet over 2% in under ten minutes, erasing the previous gains [1].

The market correction was not confined to Bitcoin alone. Ether (ETH) and other altcoins also faced pressure, with the broader crypto market witnessing a $100 billion wipeout in a single 24-hour period [3]. This whale, whose holdings originated from HTX six years ago, has continued to liquidate assets by transferring 12,000 BTC to Hyperunite on the most recent day of the sell-off. According to blockchain analysts, the whale still holds a total of 152,874 BTC across multiple addresses [1]. The sudden and large-scale sell-off is believed to have been executed in a relatively illiquid market, compounding the downward pressure on Bitcoin’s price.

Options market data further signaled a bearish sentiment among traders. Deribit-listed Bitcoin options revealed continued risk aversion, with 25-delta risk reversals remaining in negative territory through December expiry dates. This indicates that put options, which provide insurance against price declines, were more expensive than call options, reflecting a hedging preference among investors [1]. Amberdata noted that the negative risk reversal suggests that traders are pricing in uncertainty and preparing for a potential downside move, despite Powell’s dovish rhetoric [1].

Bitcoin’s subsequent price behavior has been characterized by defensive trading, with bulls currently defending the $110,530 support level. While the bears have maintained pressure, some analysts believe the market is still within its trading range, with potential for a recovery above the 20-day exponential moving average (EMA) of $115,639. A successful rebound would indicate renewed buying interest, potentially setting the stage for another test of $117,500. However, failure to hold above $110,530 could lead to a deeper correction toward $105,000 or even $100,000 [2].

Meanwhile, Ethereum has shown relative resilience despite the broader market downturn. ETH reached a new all-time high of $4,956 before retreating on Monday, suggesting profit-taking by short-term traders. The ETH/USDT pair is currently consolidating near its 20-day EMA of $4,349, with analysts watching for a potential rebound to the $5,000 level and beyond [2]. In contrast, altcoins like XRP and Dogecoin have faced downward pressure, with XRP forming a descending triangle and DOGE struggling to maintain a range between $0.21 and $0.26 [2].

The market’s reaction to the large whale’s actions underscores the ongoing debate about the influence of institutional players and large-scale holders on Bitcoin’s price. Vincent Liu of Kronos Research noted that while a single whale could initiate such a sell-off, it is more likely the result of coordinated actions involving institutional participants. This aligns with broader market concerns about liquidity imbalances and the potential for further volatility in the coming days [3].

Source:

[1] Bitcoin Reverses Powell Spike With a Flash Crash as Options Market Signals Jitters Ahead (https://www.coindesk.com/markets/2025/08/25/bitcoin-reverses-powell-spike-with-a-flash-crash-as-options-market-signals-jitters-ahead)

[2] SPX, DXY, BTC, ETH, XRP, BNB, SOL, DOGE, ADA, LINK (https://cointelegraph.com/news/price-predictions-8-25-spx-dxy-btc-eth-xrp-bnb-sol-doge-ada-link)

[3] Bitcoin Price 'Flash Crash' Panic Suddenly Wipes $100 Billion from Crypto Market (https://www.forbes.com/sites/digital-assets/2025/08/25/bitcoin-price-flash-crash-panic-suddenly-wipes-100-billion-from-crypto-market/)