Many people were confused by this flash crash. Clearly, last Friday everyone was praising Powell's favourable information, and over the weekend $ETH broke new highs, but within two days there was a big dump across the board.

The core reason is: a large whale dumped 24,000 BTC onto the exchange, causing a massive sell-off. Within twenty minutes, it broke through the market, and the price directly plummeted. By Tuesday, $BTC had fallen to around 110,000 dollars.
The key is that a single large order itself is not scary; what is scary is hitting the leverage position's critical point. Once the technical support level is broken, high-leverage long positions are forcibly liquidated in bulk, and the liquidation orders continue to hammer the market, creating a vicious cycle. This wave saw approximately 500 to 800 million USD of long positions liquidated across the entire network.
Additional background: Bitcoin spot ETFs have seen a net outflow for 6 consecutive days, with over 14 billion USD in net outflows from cryptocurrency products last week, leading to a tight funding situation. The combination of sell-offs and outflows has resulted in a flash crash.
The most affected is still $ETH. Many people use a unified margin account, and when BTC falls, the equity shrinks, causing ETH long positions to be liquidated as well. Moreover, ETH was even “pulled hard” during the BTC drop, effectively taking the hit for BTC.
Moreover, market makers generally use a combination position for BTC/ETH. When there is a risk with BTC, ETH naturally has to reduce its position as well.
So this wave movement can be broken down into:
Whale sell-off → Leverage liquidation → Forced liquidation chain reaction → ETF capital outflow intensifies → BTC/ETH double kill.
Then $ETH has piled up nearly 1 billion USD in liquidation positions around 4300.
If a new round of rise is really initiated, the possible way to go is —
👉 First, take a needle and directly sweep away this batch of leveraged positions,
👉 Clean up the floating chips, then pull up with the trend.