Crypto markets saw nearly $900 million in liquidations over the past 24 hours as Bitcoin and Ether experienced sharp declines, erasing gains following the Federal Reserve chair’s Jackson Hole speech hinting at interest rate cuts.
Bitcoin briefly fell below $109,000, marking a seven-week low and a 12% correction from its August 14 high of $124,000.
Ether dropped from $4,700 to $4,400, with $320 million in forced unwinds, while Bitcoin accounted for $277 million, per CoinGlass data.
Solana, XRP, and Dogecoin saw an additional $90 million in liquidations.
The total market capitalization dipped below $4 trillion, settling at $3.84 trillion, reflecting a $200 billion exit from the space.
A large holder selling 24,000 BTC contributed to the intensified selling pressure, according to Rachael Lucas, crypto analyst at BTC Markets.
Volatility spiked significantly post-correction.
Bitcoin’s daily volatility rose from 15% to 38%, while Ether’s surged from 41% to 70%, as reported by Derive.xyz.
This spread indicates Ether’s rallies attract heavier leverage, leading to sharper liquidations during downturns.
Options markets turned defensive, with a negative 25-delta skew signaling a preference for puts, the strongest in two weeks.
Traders are now watching key levels, with a 35% chance Bitcoin revisits $100,000 and a 55% chance Ether retests $4,000 by September’s end, based on market pricing.
The correction aligns with broader market dynamics, including an overnight dip in the S&P 500, which pressured risk assets.
September has historically been bearish for crypto during bull market years, with notable pullbacks in 2017 and 2021.
Upcoming economic data, including GDP figures on August 28 and U.S. unemployment numbers in early September, may add further volatility.
While leverage has been flushed, concentrated positioning in Ether suggests continued turbulence, particularly compared to Bitcoin, where implied volatility hit record lows post-Jackson Hole.