Bitcoin Flash Crash wipes $550M as investors pivot to Ether

The crypto market endured a turbulent weekend as a Bitcoin flash crash sent prices tumbling below $111,000, triggering more than $550 million in liquidations across major exchanges. The sell-off was sparked by a single large transaction: a whale offloaded 24,000 BTC — valued at over $300 million — into thin liquidity, according to on-chain data reported by CoinDesk.

The sharp decline erased gains made after Federal Reserve Chair Jerome Powell’s remarks on Friday, with bitcoin briefly dipping under $111,000 before recovering to about $112,800 by Monday morning in Asia. The episode underscored the market’s fragility and renewed debate about bitcoin’s dominance as investors increasingly explore alternatives.

“Large-scale liquidations like those caused by this Bitcoin flash crash highlight how quickly leveraged positions can unravel in thinly traded conditions,” — Jeff Mei, Chief Operating Officer, BTSE.

$550 million in liquidations hit traders

Data from derivatives trackers show that the weekend downturn forced the closure of more than $238 million in bitcoin positions and $216 million in ether (ETH), bringing the total liquidation tally above $550 million in 24 hours. Exchanges stepped in to automatically close leveraged bets as prices fell, amplifying the wave of forced selling.

Analysts note that such flush-outs can serve as a reset for overheated markets. A wipe of long positions can create conditions for a rebound, while a cluster of short squeezes may fuel the next upward move. Still, the Bitcoin flash crash serves as a cautionary tale for traders leaning too heavily on leverage.

“Liquidations remain the biggest structural weakness of crypto markets,” — Augustine Fan, Analyst at SignalPlus. “The speed and scale of this Bitcoin flash crash show how positioning imbalances can trigger cascade effects.”

Ethereum holds firm as institutions rotate

While bitcoin faltered, ether showed resilience, climbing 9% over the week to trade near $4,707. Analysts suggest institutional investors are gradually rotating exposure from bitcoin to Ethereum, betting that its smaller market cap makes it more responsive to broader liquidity inflows.

Ethereum’s role in powering stablecoins, smart contracts, and tokenization has also bolstered its appeal. Institutional treasuries have increased ETH allocations, with several market participants speculating that Wall Street is beginning to see Ethereum as more than just a secondary play.

“Ethereum’s momentum and relatively small market cap compared to Bitcoin would give it more upside if the pending Fed rate cut boosts money supply,” — Jeff Mei, BTSE.

Ether’s $10,000 target gains traction

Investor optimism around Ethereum has reignited talk of a potential run to $10,000. Some analysts argue that the shift is not purely macro-driven but also reflects Ethereum’s expanding adoption across traditional finance.

“Ether’s new all-time high is a clear sign of investor demand beyond just bitcoin,” — Samir Kerbage, Chief Investment Officer, Hashdex.

Year-to-date, ether has gained 45%, outpacing bitcoin and strengthening the narrative of institutional rotation. While the Bitcoin flash crash has raised alarms about market stability, it has also accelerated the conversation about Ethereum’s rising prominence in global finance.

Market outlook

With the Federal Reserve signaling a potential rate cut, both bitcoin and ether could see renewed inflows in the coming weeks. However, the Bitcoin flash crash underscores the persistent risks tied to concentrated holdings and high leverage. Investors now face a critical question: will bitcoin reclaim its dominance, or is Ethereum’s ascent marking the beginning of a structural shift?