Market Tremors: Bitcoin and Ethereum Battle for Critical Support Levels as Fear Grip Tightens
Crypto markets wobble as foundational pillars show cracks. Bitcoin and Ethereum—the twin engines of digital asset growth—face their sternest test since the last bull run.
Technical Breakdown
Support levels that held firm through Q2 now resemble overstretched rubber bands. Neither asset manages consecutive green closes—a worrying signal for momentum traders. The fear-greed index plunges toward extreme fear territory for the first time this quarter.
Market Psychology
Traders pivot to risk-off mode faster than a decentralized exchange flash loan attack. Leveraged positions unwind across major platforms while stablecoin dominance spikes—the classic flight-to-safety playbook unfolding in real time.
Institutional Response
Whale wallets accumulate during dips but retail capitulation accelerates. The divergence creates textbook conditions for either a vicious squeeze or prolonged consolidation—depending on which side blinks first.
Traditional finance pundits already dust off their 'told you so' speeches—conveniently forgetting their own portfolios bled harder during last month's bond market rout. Crypto volatility remains the scapegoat for broader macroeconomic jitters.
$329M wiped out as crypto rebounds
Data shows that $186 million worth of liquidated bets (56%) turned out to be long positions. However, Short bets amounted to $143 million. This shows that the crypto market is witnessing heavy fluctuations with pumps and dumps. Cryptopolitan reported that Thursday witnessed $1.1 billion liquidation washout.
The recovery coincided with fresh inflation data that matched forecasts. The Fed’s preferred gauge, PCE, rose 2.7% in August, while the Core measure was up 2.9%. The numbers were hardly surprising, but they reinforced the sense that price pressures are easing. Analysts suggest that if inflation trends lower, risk assets may find support, but any upside surprises could quickly reset rate cut expectations.
Ethereum led the altcoins’ recovery by rising nearly 4%. ETH is down by 18% from its all-time high of above $4,900. Solana and Dogecoin added marginal gains. After a great run, SOL is trailing by 15% in the last 7 days. It is trading at an average price of $203 at the press time.
However, Hyperliquid’s HYPE token was the lone standout in the top tier. It is up by more than 7% and bucking the sea of red. HYPE price is now up by 86% on a year-to-date (YTD) basis. It is trading at an average price of $44.64 at the press time.
Crypto fear hits 5-month low
The Fear and Greed Index dropped to its lowest since April to hit 28 points on the chart. This signals “fear” across the market. Analysts pointed to heavy stress among short-term holders as bitcoin traded under their cost basis of $109,700 for the first time in five months.
BTC price has been running down by 6% over the last 7 days. It is trading at an average price of $109,601 at the press time. The 24-hour trading dipped by 18% to stand at $60.92 billion.
Some see a silver lining in the cleanout. Analyst Maartunn, in a post, mentioned that roughly $12 billion in Leveraged altcoin bets and $3 billion in speculative Bitcoin positions have been flushed.
Stocks and commodities painted a calmer picture as the S&P 500 gained 0.22% and Gold edged higher. But a new wrinkle looms with Donald Trump’s latest tariff package set to take effect on October 1. That announcement could shake up risk appetite across markets and crypto.
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