ETH fell below $4100. Is it "a continuous decline" or a bottom rebound?

Original | Odaily Planet Daily (@OdailyChina)

In the past two days, the cryptocurrency market has once again retraced, with major coins breaking through key support levels, led by ETH.

According to OKX market data, BTC fell to a low of $112,500, currently reported at $113,580, with a maximum drop of over 3% within 24 hours; ETH's decline was even more severe, hitting a daily low of $4,062, with a maximum drop of 5%, currently reported at $4,180; over the past 48 hours, ETH has cumulatively retraced more than 8%, nearly erasing all gains from last week.

In terms of other assets, SOL briefly fell below the $176 mark, currently reported at $180.51; high Beta altcoins like DOGE, PEPE, and TRUMP also retraced, with declines concentrated in the 7% – 10% range.

Sector-wise, according to SoSoValue data, as of August 20, the PayFi sector, which performed relatively well yesterday, fell by 5.65% today, with XRP down 5.52% and TEL down 7.17%; the Layer 1 sector dropped by 3.35%, with Cardano (ADA) seeing a decline of up to 8.83%; the Layer 2 sector fell by 3.75%, while Mantle (MNT) rose against the trend by 5.51%; the DeFi sector decreased by 4.25%, with Lido DAO (LDO) slightly up by 1.01%; the Meme sector overall dropped by 5.25%, with MemeCore (M) rising against the trend by 6.91%.

In the derivatives market, according to Coinglass data, the total liquidation amount across the network in the past 24 hours reached $452 million, with long positions liquidated amounting to $373 million. The liquidation amount for BTC was approximately $102 million, while ETH's liquidation reached $175 million, making it the current "disaster zone" for liquidations.

Lookonchain monitoring shows that in just the past 12 hours, multiple whale addresses have transferred over 34,000 ETH to centralized exchanges, with a total value of about $140 million, intensifying market panic due to the concentration of whale sell-offs.

On the funding side, there is also no significant support. According to SoSoValue data, yesterday (August 19), the net outflow of Ethereum spot ETFs reached $197 million, the second highest in history. Among them, BlackRock and Fidelity's two ETF products recorded outflows of over $80 million each.

Bitcoin and Ethereum have tested key support levels for two consecutive days, with market sentiment turning sharply pessimistic. The outflow of funds, whale sell-offs, and ETF net outflows are resonating together. In the face of increasing investor divergence, is the market undergoing a phase adjustment or is it a prelude to a deeper correction?

Odaily Planet Daily will summarize the latest views from on-chain data platforms, institutional research, and traders for readers' reference.

Will Bitcoin stabilize after its decline, and how will Ethereum perform in the future?

Santiment: Retail sentiment turns extremely bearish, possibly signaling a market reversal

On-chain data platform Santiment indicates that after BTC fell below $113,000, retail traders' sentiment has sharply turned pessimistic in the past 24 hours, reaching its lowest level since the sell-off triggered by geopolitical conflicts on June 22.

Historical experience shows that extremely pessimistic sentiment is often one of the important signals for a potential rebound, which may provide long-term investors with an opportunity to position themselves.

Although ETH is leading the decline, the main narrative in the cryptocurrency market remains centered on Bitcoin. As BTC fell below $113,000, institutions also began to provide their expectations.

Delphi Digital: TGA replenishment expected to withdraw $500 to $600 billion in market liquidity

Delphi Digital stated that the U.S. Treasury will initiate a replenishment of the Treasury General Account (TGA) in the coming weeks, planning to withdraw about $500 to $600 billion in liquidity from the market over the next two months. Unlike previous rounds, this replenishment lacks a buffer: the Federal Reserve is still draining liquidity through quantitative tightening (QT), reverse repurchase agreements (RRP) are nearly exhausted, and banks are constrained by capital rules and book losses, while overseas buying from countries like China and Japan has also significantly retreated. In other words, this fundraising will directly extract funds from market liquidity.

This change is particularly sensitive to the cryptocurrency market. Historical data shows that during the liquidity easing in 2021, the supply of stablecoins expanded alongside the TGA's increase; however, in 2023, the supply of stablecoins has shrunk by over $5 billion, causing the cryptocurrency market to stagnate. The liquidity environment in 2025 is expected to be even tighter, and if the supply of stablecoins contracts again, high Beta assets like ETH may face relatively larger declines compared to BTC, unless offset by inflows from ETFs or corporate funds.

Greeks.Live: Divergence in BTC trends, focus on the $112,000–$130,000 range

Options analysis platform Greeks.Live pointed out in a community briefing that there is a clear divergence in the market regarding BTC's trend: some traders believe the short-term outlook is weak and that there is still room for further declines; others believe that the liquidation of long positions is nearing its end and a rebound is about to start.

From a technical perspective, BTC is still operating within a range, with key observation levels at $112,000 to $130,000. In terms of options strategy, traders are generally employing a "double sell" strategy in the $112,000–$120,000 range, waiting for market breakout signals.

BMO Senior Strategist: Powell may "douse" market optimism for a September rate cut

Ian Lyngen, head of U.S. interest rate strategy at BMO Capital Markets, stated that although the current market bets on an 80% probability of a 25 basis point rate cut at the September meeting, and even 325,000 options are betting on a 50 basis point cut, the real risk lies in Powell's speech this Friday potentially "dousing cold water" on the market's expectations for aggressive easing.

If the Federal Reserve maintains a hawkish stance, it could trigger broader volatility in risk assets, including the cryptocurrency market, which may continue to face pressure.

Arthur Hayes: "Cannot judge" Powell's speech, chooses to avoid the spotlight

Arthur Hayes, co-founder of BitMEX, stated that he "cannot judge how the market will react" to the upcoming Jackson Hole Global Central Bank Conference, and therefore chooses to "enjoy the late summer" and refrain from excessive predictions.

This statement, while seemingly relaxed, also reflects the current market's high uncertainty regarding macro variables and the divergence in investor expectations.

Tom Lee: Speech may be "interpreted as dovish," U.S. stocks and crypto markets may see recovery

Tom Lee, chairman of BitMine's board, stated that most institutional investors expect Powell to maintain a hawkish tone at Jackson Hole, but since the market has already set this as a precondition, the speech may instead be "interpreted as dovish," potentially driving a phase rebound in U.S. stocks and risk assets after the speech concludes.

For BTC, this means there may be a window for technical recovery after a short-term decline.

Bernstein: Bull market may extend to 2027, Bitcoin target set at $200,000

Bernstein analysts released a report stating that the current cycle of the cryptocurrency bull market is supported by U.S. policy and increased institutional participation, and is expected to extend to 2027.

Among them, the price target for Bitcoin over the next year has been raised to the $150,000–$200,000 range, becoming an important pricing reference for medium to long-term investors.

Summary: Short-term pressure unresolved, rebound signals await confirmation

The Federal Reserve's hawkish tone has disturbed market sentiment, leading to a concentrated retracement of crypto assets under the influence of capital outflows and whale sell-offs. ETH fell below $4,100, BTC tested $113,000, and the scale of liquidations in the derivatives market expanded.

Despite the clear short-term pressure, Santiment data shows that retail sentiment has reached an extremely pessimistic zone, which historically often corresponds to the starting point of a phase rebound in the market. With Powell's key speech approaching, whether BTC can stop its decline and stabilize may become a key signal for judging the market direction.

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