Bitcoin and Ethereum price volatility intensifies... Concerns over market structure weakening amid '$400 million liquidation tsunami'

On Wednesday, the cryptocurrency market experienced a resurgence of extreme volatility, leading to a chain reaction of large-scale position liquidations across global futures exchanges.

Within just two hours, Bitcoin and Ethereum rapidly shifted from gains to losses, with over $400 million in leverage liquidations occurring.

Ethereum’s price fell to the $2,600 range, with liquidation amounts reaching $150 million, while macroeconomic headwinds combined with ETF net outflows have amplified market shocks.

Repeating Past Patterns of ‘Extreme Volatility’…Suspicions of Institutional Involvement Arise

In the early hours of the US market open, Bitcoin surged from $86,000 to above $90,000, only to plummet back to $85,000. Similarly, Ethereum rose from $2,900 to $3,100 during the same period before dropping near $2,600.

This ‘rise-fall’ pattern is not new. Over the past two weeks alone, similar price oscillations have occurred more than four times, raising questions among market participants. Some claim that institutions are deliberately manipulating prices, while others argue that algorithms quickly scan thin liquidity zones and automatically close positions as part of natural market dynamics.

$400 Million Liquidation Scale…HyperLiquid HYPE Suffers Largest Loss

According to CoinGlass data, this volatility resulted in over $400 million in leveraged positions being liquidated across the global crypto futures market.

Ethereum liquidations exceeded $150 million, primarily from long positions. Bitcoin saw $140 million in liquidations, with short positions accounting for $78 million. This indicates that short positions were liquidated first during the surge, followed by long positions during the sharp decline.

Notably, HyperLiquid’s HYPE/USD position experienced a single order liquidation of approximately $10.8 million, the largest recorded. The total liquidation amount on HyperLiquid this month has reached $33 million, marking an all-time worst scenario.

However, experts suggest that actual liquidation figures could be much higher than reported due to API delays across exchanges, data collection limitations, and missing trading volume from OTC transactions.

ETF Net Outflows Weaken the Market’s ‘Cushion Function’

A more fundamental issue lies in ETF capital flows. According to SoSoValue data, net outflows from Bitcoin and Ethereum ETFs exceeded $1 billion over the past two days.

In normal markets, new capital inflows act as a ‘buffer,’ absorbing volatility. Currently, however, capital is leaving, making prices highly sensitive to even small shocks.

Mike Marshall of AmberData Research states, “In a weak underlying market structure, if ETF inflows are minimal, it becomes difficult for the market to stabilize quickly when price momentum reverses.” The combination of interest rate uncertainties and risk-averse sentiment further intensifies bearish pressures.

Where is the Next Major Support Level?

Marshall based his market outlook on the ETF average purchase price(Cost-Basis) analysis.

“Currently, around $80,000 is a significant first support level. If ETF net outflows continue or financial conditions tighten further, $60,000 will become the next key reference point,” he said.

As of Wednesday afternoon, Bitcoin(BTC) is trading around $93,390, and Ethereum(ETH) is around $3,260, with 24-hour changes of -0.39% and +2.42%, respectively.

Given the weakening market structure and macroeconomic uncertainties, the future price direction will likely depend on a turnaround in ETF capital flows and the recovery of risk asset investor sentiment.