What happened and why?
1. Rapid crash (Flash Crash) amid heavy selling from a 'whale'.
A massive amount of Bitcoin (around 24,000 BTC) was sold by a large entity, leading to a swift price drop on Sunday, followed by a significant liquidation of long positions, especially in Bitcoin and Ethereum.
During the same period, the market saw liquidations exceeding $838 million, including $273 million in Bitcoin and $296 million in Ethereum.
2. Influences from the Federal Reserve Chair's speech.
Prices temporarily rose after Jerome Powell's statements that interest rate cuts are possible, but market gains were stripped from this momentum due to the large selling mentioned above.
3. Binance data and other research support the decline.
According to market data on Binance, the price of Bitcoin fell below 111,000 USDT, with a drop of about 3.42% over 24 hours, according to today's data.
Glassnode/BlockBeats analysis indicates that all categories of Bitcoin holders (from 10 to 100 coins) have entered the distribution phase, which is a broad selling signal.
4. Weak liquidity and collapsed 'buying power ratio'.
The Buying Power Ratio on Binance dropped sharply from around 2 to -0.81 between August 16 and 17, which was considered a 'typical warning' of market liquidity running out and declining demand, followed by a significant drop from ~$124,474 to ~$114,786.
5. General market tension and technical reviews indicate key support.
The total market capitalization of cryptocurrencies shrank by $42 billion within 24 hours, as the market tested support at ~3.81 trillion dollars while Bitcoin traded around $113,500, with key support at $112,526.
Technical analysis indicates that Bitcoin may be about to test support levels between $112–111 thousand before a reversal or trend continuation.
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Overview: Reasons and key figures.
Factor Details
Large whale selling Liquidation of 24,000 BTC drove prices down quickly.
Impact of Powell's speech Temporary upward push followed by intense selling pressure.
Liquidity drop The buying power index is severely negative, reflecting decreased demand.
Market data shows a drop to ~111,000 USDT and the exit of all holder categories from distribution.
Technical analysis Critical support between $112–111 thousand USD, may see a bounce or a deeper test.
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What could happen next?
Continued selling pressure and a worsening trend may push prices towards additional support levels around $110,000 or lower.
If the market regains strength above the $112.5–113 thousand level, it may retest resistance at $115–117 thousand.
The over-optimism indicator or rapid pullback after panic waves (contrarian bounce) is likely an opportunity for a short-term bullish vote.
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Summary
The market experienced a rapid decline due to 'whale' interactions with liquidity pressures, despite partial stimulus from Powell's statements.
The most important technical support is located in the $111–112 thousand area. Breaking it may indicate further decline, while surpassing it could allow for a short upward reaction.
Traders and observers should closely monitor liquidity flows, trading volume data, and statements from top economic officials in the coming hours and days.
