Ethereum News Today: Bitcoin and Ethereum Drop Amid Leverage Unwinding and Macroeconomic Uncertainty

The cryptocurrency market, which had been riding a wave of bullish optimism, has faced a brutal and swift correction. In a single 24-hour period, over $500 million in long positions were liquidated, dragging down major assets including Bitcoin, Ethereum, and XRP. This sharp downturn came amid profit-taking, excessive leverage exposure, and a backdrop of macroeconomic uncertainty, particularly in anticipation of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole [1].

The correction has exposed the fragility of a market increasingly driven by leverage and speculative fervor. Bitcoin dropped to as low as $114,706 before briefly rebounding to around $116,000. Ethereum lost 3.3% in value, while XRP temporarily broke a key support level at $3, signaling heightened selling pressure [2]. On-chain data reveal a long/shorts ratio of 5:1, indicating a dangerously skewed bullish bias. Bitcoin’s RSI stands at 47, placing it in a neutral zone, while its ADX index at 21 suggests no clear trend, with prices likely to move sideways in the near term. XRP’s ADX remains below 25, pointing to a hesitant market lacking directional clarity [1].

Despite the broader downturn, Ethereum has shown a more resilient technical structure. Its RSI at 61 indicates continued buying pressure, and its ADX index at 46 suggests a strong bullish trend. The 50-period exponential moving average (EMA) remains above the 200-period EMA, offering a buffer for long-term investors. Additionally, the Squeeze Momentum indicator is currently inactive, signaling an end to extreme volatility and a potential consolidation phase [1].

Market analysts are closely watching the balance of short positions in the crypto space. A record $6 billion in short bets against Bitcoin could trigger massive liquidation events if the price surpasses $124,000. This highlights the precarious nature of current trading conditions and the potential for rapid reversals [2].

While some optimism persists, particularly around Ethereum’s technical strength, the overall market sentiment has shifted toward caution. Predictive markets show a decline in bullish expectations, with only 77% of participants on Myriad platform expecting Ethereum to reach a new all-time high by year-end, down from 93% the previous week [1]. This moderation in sentiment is a sign that the market is recalibrating after months of euphoria.

The correction has also impacted publicly traded crypto-related firms, as their valuations face downward pressure. This has prompted a reassessment of risk strategies within the sector, especially for companies heavily exposed to crypto assets [6]. As the market adjusts, the narrative is shifting from speculative hype to a more measured approach, with investors seeking clearer signs of sustainability and stability.

The current correction, while painful, may ultimately serve as a necessary reset for the crypto market. As technical indicators reassert their relevance and leverage unwinds, investors are being forced to reconsider their strategies. For Ethereum, the stronger chart structure could position it as a relative safe haven in a broader bearish environment, but the overall market is clearly entering a phase of consolidation and reassessment [1].

Source:

[1] Coinmarketcap - https://coinmarketcap.com/community/articles/68a408499ef597605f476b35/

[2] Binance - https://www.binance.com/en/square/post/28463331122457

[6] Facebook - https://www.facebook.com/photo.php?fbid=747503918162819&set=a.130****63246274&type=3