After hitting a new high, the giant whale "switched", and Wall Street "buyed the bottom"? In the past 48 hours, Bitcoin and Ethereum have been “shocking”

# Source: Wall Street CN

Over the past 48 hours, the world’s two major cryptocurrencies have experienced extreme market volatility. Bitcoin suffered a "flash crash" after hitting a new high on Sunday, while Ethereum also plummeted sharply following its all-time high. What exactly happened behind the "dramatic turbulence" of these two cryptocurrencies?

According to reports, the severe volatility in the cryptocurrency market stemmed from a series of chain reactions: First, Federal Reserve Chair Jerome Powell’s dovish remarks at the Jackson Hole Economic Policy Symposium pushed Bitcoin to soar to nearly $117,200 on Friday. After Ethereum hit a new high, it climbed further on Sunday, refreshing its all-time high to $4,954. However, a Bitcoin "whale" (a large holder) who had held the coins for over 5 years suddenly sold 24,000 Bitcoins, triggering a cascading sell-off.

On Monday, Bitcoin fell further to around $110,500 and broke below its 100-day moving average for the first time since April. Ethereum plummeted from its all-time high to $4,400. The sudden sell-off by the whale led to over $550 million in forced liquidations for both Bitcoin and Ethereum positions.

Analysts point out that the core of the market turbulence lies in a large-scale capital reallocation. There are signs that this portion of capital is flowing into Ethereum, with approximately $2 billion worth of Bitcoin funds being reallocated to Ethereum.

Additionally, rumors suggest that amid this round of severe market volatility, institutional investors such as BlackRock and high-frequency trading giant Jane Street are buying the dip, while ETFs like those managed by Fidelity have recorded significant capital inflows. The operations of market makers like Jane Street are also believed to have exacerbated market volatility.

However, Joel Kruger, Market Strategist at LMAX Group, stated that despite the short-term pullback, institutional confidence remains firm.

## Weekend "Tale of Two Cities": New Highs and Flash Crashes Coexist

Bitcoin and Ethereum have exhibited drastically different market trends over the past 48 hours. On Friday, Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Policy Symposium opened the door to a potential interest rate cut, driving a sharp rise in cryptocurrency prices.

Bitcoin soared from approximately $112,000 to nearly $117,200. After surging on Friday, Ethereum climbed further on Sunday, touching an all-time high of $4,954—surpassing its previous peak of around $4,891 in November 2021.

Joel Kruger, Market Strategist at LMAX Group, said:

"Powell’s hints of an interest rate cut initially boosted market sentiment, but the nuances in his wording and a tone that was not dovish enough made the market uneasy."

Beyond this, the reversal of the cryptocurrency rally was also driven by whale sell-offs. According to CoinDesk, a Bitcoin whale sold 24,000 Bitcoins on Sunday, triggering a "flash crash." This move caused a chain reaction during the weekend when market liquidity was thin.

As a result, Bitcoin’s price dropped by more than 2% within 10 minutes, hitting a low of $110,500. By Monday afternoon, Bitcoin had fallen further to around $110,500, narrowing its gain since the start of 2025 to approximately 18%.

Jacob King of WhaleWire pointed out that the whale’s action triggered panic selling among other traders, intensifying the downward spiral. This liquidity crunch was further exacerbated by the increase in leveraged long positions in the previous week.

Compared to Bitcoin, although Ethereum also pulled back to $4,400, its year-to-date gain still exceeds 31%, significantly outperforming Bitcoin in relative terms.

## Whale "Switching": A $2.7 Billion Strategic Shift

The core of this round of market turbulence is a large-scale capital reallocation. On-chain analysis shows that the whale account that sold 24,000 Bitcoins still holds 152,874 Bitcoins, worth over $17 billion, and the investor has held these Bitcoins for more than 5 years.

More crucially, data on capital flows indicates that after the Bitcoin sell-off, a substantial portion of the funds was reinvested in Ethereum. Two entities reallocated $2 billion worth of Bitcoin funds to Ethereum, of which 275,500 Ethereum (valued at $1.3 billion) have been staked.

Analysts believe that this capital reallocation reflects a broader shift in market sentiment, as investors are more optimistic about Ethereum’s growing utility in stablecoins, tokenization, and smart contracts.

Jeff Mei of BTSE and Samir Kerbage of Hashdex pointed out that compared to Bitcoin, Ethereum’s smaller market capitalization may lead to a more pronounced response to the Federal Reserve’s potential interest rate cuts and increased systemic liquidity.

According to data from CoinGlass, Bitcoin positions worth $273 million and Ethereum positions worth $296 million were liquidated in the past 24 hours, with the total liquidation amount for cryptocurrencies reaching $838 million.

## Wall Street "Bottom-Fishing" Rumors: Institutional Funds Make Contrarian Layouts

Amid severe market volatility, rumors suggest that Wall Street institutions are seizing the opportunity to buy the dip. Financial blog ZeroHedge posted on social media platform X that institutions such as Fidelity, Bitwise, and 21Shares have seen significant capital inflows, and the market is closely monitoring the movements of large asset management companies like BlackRock.

It is rumored that Fidelity has recorded a net inflow of $87 million, Bitwise $9.7 million, and 21Shares $5.6 million. The market is still awaiting BlackRock’s latest moves. Although these data have not yet been officially confirmed, they reflect that institutional investors may be taking advantage of the market pullback to increase their holdings of cryptocurrency assets.

Another rumor that has attracted attention involves the operations of market maker Jane Street. Sources claim that the company’s "momentum deception" operation caused Ethereum to enter a correction less than 24 hours after hitting an all-time high, described as one of the "most brutal" operations in history.

However, the overall capital flows of ETFs show divergence. According to data from Farside Investors, spot Bitcoin ETFs have recorded net outflows for six consecutive trading days as of last Friday, totaling $1.19 billion.

Spot Ethereum ETFs previously recorded net outflows of $925.7 million over four consecutive trading days but saw a net inflow of $625.3 million on Thursday and Friday.

Despite severe short-term volatility, analysts remain cautiously optimistic about the medium-to-long-term outlook. Kruger from LMAX said: "As long as Bitcoin stays above $110,000 on a weekly closing basis, the market is expected to maintain good resilience amid declines."

Alex Krüger of Aike Capital pointed out that once short-term volatility subsides and the price breaks through the key resistance level of $113,500-$114,000, Bitcoin may regain upward momentum.

Options data also indicates sustained bullish sentiment. Sean Dawson of on-chain options platform Derive said that the market has not been shaken by the pullback, and fundamentals remain intact. The current 7-day Relative Strength Index (RSI) indicates an oversold condition, but there is no clear reversal signal yet.

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