Bitcoin Flash Crash Triggers $550M Liquidation Wave as Ether Strengthens on Rotation Narrative

A sharp weekend selloff rattled crypto markets after a major Bitcoin holder offloaded 24,000 BTC — worth over $300 million — into thin liquidity conditions, triggering widespread liquidations and erasing gains driven by Friday’s dovish comments from Fed Chair Jerome Powell.

Bitcoin briefly plunged below $111,000 during the flash crash before stabilizing near $112,800 by Monday morning in Asia, according to CoinDesk data. The whale in question moved the entire balance to Hyperunite, with 12,000 BTC transferred on Sunday alone, per blockchain monitoring.

The selloff unleashed over $550 million in liquidations across crypto markets within 24 hours, including $238 million from BTC-linked positions and another $216 million tied to ether (ETH). Analysts say the forced deleveraging — especially of long positions — could help reset markets for a healthier bounce, while short liquidations later could drive upside momentum.

Despite the Bitcoin turbulence, ether remained resilient. ETH traded near $4,707, up 9% over the past week, supported by increasing signs of capital rotation from BTC to ETH as investors weigh the potential impact of a September rate cut by the Federal Reserve.

“Ethereum’s relatively smaller market cap and strong momentum make it well-positioned for outsized gains if monetary easing resumes,” said Jeff Mei, COO of BTSE. “Rate cuts tend to inject liquidity, which could disproportionately benefit Ethereum and other altcoins.”

SignalPlus’s Augustine Fan echoed the sentiment, citing structural shifts in institutional allocations: “ETH treasuries have seen a notable increase in market cap relative to BTC, with the ETH/BTC ratio rebounding to technically significant levels.”

Analysts note that the shift isn’t purely macro-driven. Institutional flows, treasury diversification, and Ethereum’s increasing role in digital asset infrastructure are all contributing to the momentum.

“Ether’s new all-time highs highlight sustained investor interest that extends beyond Bitcoin,” said Samir Kerbage, CIO at Hashdex, in an email to CoinDesk over the weekend.

With ETH now up 45% year-to-date, price targets in the $10,000 range — once seen as ambitious — are increasingly gaining traction. Ethereum’s foundational role in stablecoin issuance, tokenization, and enterprise smart contract infrastructure is fueling long-term bullish sentiment among traditional financial players.