Crypto Liquidations Surge as Bitcoin and Ethereum Face Downward Pressure

Bitcoin and Ethereum face price corrections, leading to significant liquidations. Are crypto treasury companies to blame? Find out more.

Crypto Liquidations Surge as Bitcoin and Ethereum Face Downward Pressure

The crypto market is feeling the heat, with Bitcoin and Ethereum experiencing notable price drops and a surge in liquidations. Recent market dynamics have sparked debates about the underlying causes, from macroeconomic factors to the behavior of crypto treasury companies. Let's dive into what's happening.

Bitcoin and Ethereum Tumble: A Market Overview

Recently, Bitcoin briefly dipped below $100,000, while Ethereum touched a four-month low. These price corrections triggered substantial liquidations, with daily liquidations topping $2 billion. Long traders bore the brunt of these losses, accounting for a significant portion of the liquidations.

The Role of Crypto Treasury Companies

Blockchain author Omid Malekan points to the impact of crypto treasury companies (DATs) as a crucial factor often overlooked. According to Malekan, many of these firms, which became prevalent in 2025, may have contributed to the market decline through unsustainable business models and excessive token extraction. He argues that the behavior of these companies, driven more by speculative motives than long-term value creation, is adding downward pressure on prices.

ETF Outflows Reflect Institutional Sentiment

Adding to the pressure, U.S. spot Bitcoin and Ethereum ETFs experienced significant outflows, totaling $797 million on Tuesday. This shift suggests a change in institutional sentiment, potentially driven by fears of delayed Federal Reserve rate cuts and a stronger dollar. Such outflows indicate a recalibration of strategy among institutions, reducing their exposure to risk assets.

A Contrarian View: Smart Traders Buck the Trend

Amidst the market turmoil, some traders are taking a different stance. A trader identified as 0x9263… closed all short positions and opened substantial long positions in Bitcoin, Ethereum, Solana, and Uniswap. This move, highlighted by Lookonchain, showcases a potential divergence in strategy, with some traders betting on a market rebound despite the prevailing fear.

The Fear and Greed Index: A Gauge of Market Sentiment

The CNN Fear & Greed Index has plummeted to 21, indicating extreme fear in the market. This heightened risk aversion reflects the broader uncertainty triggered by macroeconomic factors and concerns about corporate behavior within the crypto ecosystem.

Looking Ahead: Consolidation or Crypto Winter?

The crypto market's current fragility raises questions about its future trajectory. Analyst Charles Edwards warns that institutional buying has fallen below the daily mined supply, signaling potential distribution overpowering accumulation. However, Bitwise CIO Matt Hougan offers a different perspective, suggesting that retail investors are in