After weeks of bullish euphoria, the crypto market corrected violently, revealing an underlying tension that had been ignored for too long. In just 24 hours, more than 500 million dollars in long positions were liquidated, dragging down Bitcoin, Ethereum, and XRP. This brutal wave revealed the fragility of a market doped with leverage, where technical indicators, relegated to the background by optimism, suddenly regain all their importance. A return to reality is necessary for investors.
Series of liquidations: the market trapped by the leverage effect
While the crypto market was driven by a declining CPI, on August 18, it suffered a series of massive liquidations totaling over 500 million dollars in long positions, according to CoinGlass.
This brutal correction, which affected almost all major assets, was fueled by a combination of profit-taking, excessive exposure to leverage, and macroeconomic nervousness ahead of Jerome Powell's expected speech in Jackson Hole.
Here are the key facts to remember about this day of high volatility:
More than 500 M$ liquidated in 24 h, including 190 M$ in Ethereum, 120 M$ in Bitcoin, and 20 M$ in XRP;
The longs/shorts ratio reaches 5:1, revealing a dangerous bullish bias;
Bitcoin fell to a floor of 114,706 $, before slightly rebounding around 116,000 $;
XRP temporarily broke its symbolic support of 3 $, signaling increased selling pressure;
The RSI of Bitcoin is at 47, in neutral territory;
The ADX of Bitcoin is at 21, indicating the absence of a clear trend, with prices likely to move in a range;
For XRP, the ADX remains locked below 25, suggesting an indecisive market with no directional confirmation.
