The digital asset market took a sharp hit on Tuesday, with total capitalization sliding to $3.85 trillion following a wave of liquidations and heavy selling by large holders.
Bitcoin briefly dropped below $109,214 after an address sold 24,000 BTC—worth roughly $2.7 billion—causing a sudden $4,000 dip. Despite the sell-off, on-chain data shows the whale still holds more than 152,000 BTC valued above $17 billion.
Ethereum, which touched a new record near $5,000 earlier this week, also retraced, falling to around $4,405. Even with the pullback, ETH has remained one of the better-performing major assets over recent weeks.
Nearly $1B in Leveraged Positions Wiped Out
According to CoinGlass, more than $940 million in leveraged bets were liquidated over the past 24 hours. Ethereum traders absorbed the largest share of losses at $321.6 million, followed by Bitcoin at $261.6 million.
The sell-off also dragged altcoins lower—Solana dropped 11.6% to $197, while XRP declined 5.3% to $2.88.
Fed Outlook Fuels Volatility
Last week, Federal Reserve Chair Jerome Powell suggested interest rate cuts could begin as early as September, pointing to a cooling labor market and ongoing inflation concerns. His comments initially boosted risk assets, including crypto, but the latest correction erased some of those gains.
Market watchers say mixed expectations around U.S. economic policy are adding to volatility. While some anticipate a September cut, others believe the Fed will wait for more jobs and inflation data before moving.
Analysts See Ethereum Poised for Strength
Despite macro headwinds, analysts suggest Ethereum may outperform in the short term. Bitget CEO Gracy Chen noted that Bitcoin could remain range-bound between $110,000 and $120,000 over the next two weeks, while ETH may push higher toward $4,600–$5,200.
“Whale activity indicates capital rotation from BTC to ETH, which, combined with strong ETF inflows and Ethereum’s expanding use cases, could set the stage for ETH to lead the next leg of the market rally,” Chen explained.
Institutional demand continues to support Bitcoin, but many analysts believe Ethereum’s fundamentals and regulatory clarity give it an edge in driving the next phase of crypto growth.
