In a sharp reversal from last week’s euphoric record highs and $300,000 bitcoin price targets, some of crypto’s most followed traders are now warning of looming downside risks for both bitcoin (BTC) and ether (ETH).
Bitcoin is currently trading at $115,000, down nearly 3% overnight, but relatively comfortable within its recent $112,000 to $124,000 range. ETH, meanwhile, is down by 5% over the past 24 hours at $4,317, though still 21% from a month earlier.
Among the possible reasons for Monday’s decline are jitters around the Federal Reserve’s potential rate cut in September, which would benefit risk assets liks crypto.
While rate markets continue to point to a high likelihood of a Fed cut next month, the odds per CME FedWatch have slipped to 83% from nearly 100% at one point last week.
Andrew Kang, co-founder of Mechanism Capital, was one of the loudest voices predicting crypto downside on Monday, suggesting ETH could be staring at billions in liquidations as leveraged positions unwind.
“Would estimate we’re about to hit $5 billion in ETH liquidations across exchanges,” Kang posted on X.
He forecast a possible slide in ether’s price to between $3,200 and $3,600, warning the market was “not ready to find out what happens when that buying dissipates.” His comments follow the launch of ETH DATs (Deposit Access Tokens), which drove short-term demand but may now face a vacuum of momentum.
The bearish tone comes against the backdrop of a record-breaking validator exit queue, with 885,000 ETH ($3.8 billion) awaiting withdrawal from Ethereum’s staking mechanism, as CoinDesk reported last week.
Much of the movement reflects profit-taking, the unwinding of risky leveraged staking strategies, and preparations for the launch of potential ETH staking ETFs. Large liquid staking players like Lido have seen hundreds of thousands of ETH withdrawn, adding to market jitters about potential forced liquidations.
Pseudonymous trader Flood also became increasingly vocal about the downside risk on Monday, telling followers: “Back to $2k you go Ethereum, where you belong.”
The comments reflect a stark shift in sentiment, demonstrating the fragile psychology that drives crypto markets where bullish and bearish narratives can quickly unravel.
For astute traders, however, the shift in sentiment can be seen as opportunity; as Wall Street veteran Warren Buffett once said: “Buy when there’s blood in the streets, even if the blood is your own.”