Against the backdrop of retreating overall risk sentiment, Bitcoin and Ethereum prices have continued their downward trend, with the total cryptocurrency market capitalization losing over $140 billion in a single week. Meanwhile, options worth $22 billion are set to expire, casting new shadows over market prospects.
Ethereum fell as much as 8.2%, breaking below $4,000 and hitting its lowest level in nearly seven weeks. Bitcoin dropped below $110,000 for the first time in four weeks, declining approximately 3.3%. More speculative tokens like Dogecoin and Cronos saw larger losses, plummeting 9.4% and 10% respectively.
"We're witnessing a de-risking trend across the entire market," said Lex Sokolin of venture capital firm Generative Ventures. "Memecoins, or assets without solid fundamentals, are hit first and tend to be more reflexive in both up and down movements. Many positive catalysts like regulation, digital asset treasury companies, and rate cuts have already been priced in, so the market needs a new narrative to maintain upward momentum."
The next test will come on Friday when over $17 billion in Bitcoin open interest and approximately $5.3 billion in Ethereum open interest expire, according to derivatives exchange Deribit data.
This week's pullback began with $1.7 billion in long positions being liquidated, serving as another reminder that liquidation operations on opaque offshore exchanges are common in cryptocurrency markets. Due to uneven information disclosure and varying index rules, forced liquidations can lead to significant price swings across different trading venues. According to data compiled by Coinglass, approximately $1 billion in positions were liquidated on Thursday alone.
BTC Markets cryptocurrency analyst Rachael Lucas noted that Ethereum's decline was due to "slowing institutional capital inflows" and "technical signals showing short-term pressure." She expects more liquidations if Ethereum falls below $3,800.
Since Monday, investors have withdrawn nearly $300 million from U.S.-listed Ethereum exchange-traded funds.
Further declines would pressure publicly traded companies that have incorporated billions of dollars worth of Ethereum or Bitcoin into their balance sheets. These companies' market capitalizations are closely tied to cryptocurrency prices.
The market turbulence has also affected confidence in crypto financial companies. Net asset premiums are shrinking, new share issuances are diluting existing shareholders' equity, and many stocks are trading close to the value of their token holdings.
Two digital asset management companies, Bitmine Immersion Technologies and SharpLink Gaming, saw their stock prices fall more than 8% during Thursday trading.
Despite this week's volatility, Bitcoin and Ethereum remain among the year's best-performing major assets. IG Australia analyst Tony Sycamore stated: "If we see Ethereum close below $4,000, the next stop will be between $3,700 and $3,500."