Crypto Daily Brief: $1.7B in Liquidations Rock Bitcoin and Ethereum

Crypto markets absorbed $1.70 billion in trader liquidations on Monday, with long positions making up the bulk at $1.62 billion.

The liquidation wave hit more than 400,000 accounts, making it one of the sharpest shakeouts of the year.

Traders dumped most large-cap coins, including Bitcoin (BTC) and Ether (ETH), which fell 2.85% and 8.75%, respectively. Smaller tokens, such as XRP (XRP), BNB (BNB), and Solana (SOL), within 5-6% range.

Dollar Behind Crypto’s Fall?

The downside in cryptos sharply contrasts the upside in the US dollar, indicating that investors are rushing to short-term safety as the market turns overbought.

The US dollar index (DXY), which tracks the greenback’s weight against top foreign currencies, has recovered 1.67% from its local nadir established on Wednesday.

That coincides with a circa 7.50% drop in the crypto market’s capitalization, indicating de-risking among traders.

The moves follow the Federal Reserve’s first interest-rate cut of the year, leaving markets with fewer catalysts this week. The main focus now rests on Friday’s release of the Fed’s preferred inflation gauge, Personal Consumption Expenditures (PCE), which could confirm whether the central bank maintains its dovish stance.

“Hot labor and sticky inflation would likely drag BTC toward the $107,000 downside zone,” says analysts at Novaque Research, albeit noting that:

“Softer prints could trigger a squeeze through $118,000–122,000. Until then, Bitcoin is trading not the news itself, but the setup around the news, and the range will hold until data forces a repricing.”

Bitcoin Technical Outlook

BTC continues to trade inside an ascending parallel channel, with risks of dipping below $110,000 in the near term.

Such a move would push the relative strength index (RSI) toward its key support at 37.60, potentially setting up a rebound at the channel’s lower trendline.

A successful bounce could reignite bullish momentum, targeting the channel’s upper boundary and paving the way for a retest of the $130,000 record high.

However, failure to hold the lower trendline could confirm a breakdown into a smaller descending parallel channel.

That scenario opens downside targets in the $100,000–$102,000 range, aligning with the 200-day EMA near $106,000, where stronger support may emerge.

Ethereum Eyes Bitcoin-Like Bounce Despite Short-Term Correction Risks

Meanwhile, Ethereum is retracing lower toward a confluence of support around $4,050, reinforced by its ascending trendline and the lower boundary of the current trading range.

This zone will likely act as a key test for bulls to defend. A successful hold could spark a rebound, with price eyeing the upper trendline resistance near $4,820, where ETH has repeatedly struggled to break higher.

Failure to maintain support at $4,050, however, would risk a deeper correction, potentially opening downside toward the 200-day EMA around $3,370. For now, ETH remains range-bound, with the $4,050–$4,820 corridor dictating the next major move.