After hitting a record high, "flash crash," whales "switching," Wall Street "bottom fishing"? In the past 48 hours, Bitcoin and Ethereum experienced "stunning tremors."

In the past 48 hours, the two major cryptocurrencies globally have experienced extreme market volatility. Bitcoin faced a "flash crash" after reaching a new high on Sunday, while Ethereum also plummeted sharply after hitting an all-time high. What exactly happened behind the "stunning tremors" of these two cryptocurrencies?

According to reports, the severe fluctuations in the cryptocurrency market stem from a series of chain reactions: Federal Reserve Chairman Powell's dovish remarks at the Jackson Hole economic policy symposium initially drove Bitcoin to soar to nearly $117,200 last Friday. After Ethereum reached a new high, it further climbed on Sunday, refreshing its historical high of $4,954. However, a Bitcoin whale that had held its coins for over five years suddenly sold 24,000 Bitcoins, triggering a chain reaction.

On Monday, Bitcoin further dropped to around $110,500, and for the first time since April, it fell below the 100-day moving average. Ethereum plummeted from its historical high to $4,400, and the sudden sell-off by the whale led to over $550 million in forced liquidations for both Bitcoin and Ethereum.

Analysts pointed out that the core of the market turmoil is a large-scale reallocation of funds, with signs indicating that this portion of funds is flowing into Ethereum, with about $2 billion in Bitcoin funds being reallocated to Ethereum.

Additionally, it is rumored that during this round of market turbulence, institutional investors like BlackRock and high-frequency trading giant Jane Street are buying on dips, while ETFs like Fidelity have recorded significant inflows. The operations of market makers like Jane Street are also believed to have exacerbated market volatility.

However, Joel Kruger, a market strategist at LMAX Group, stated that despite the short-term pullback, institutional confidence remains strong.

Weekend "Double City": New Highs and Flash Crashes Coexist

Bitcoin and Ethereum have exhibited completely different market trends in the past 48 hours. On Friday, Federal Reserve Chairman Powell's speech at the Jackson Hole economic policy symposium opened the door for potential interest rate cuts, significantly boosting cryptocurrency prices.

Bitcoin surged from about $112,000 to nearly $117,200, and after a significant rise on Friday, Ethereum further climbed on Sunday, reaching an all-time high of $4,954, surpassing the previous peak of about $4,891 in November 2021.

LMAX Group market strategist Joel Kruger stated:

"Powell's interest rate cut hints initially boosted market sentiment, but the subtle nuances of his wording and the not-so-dovish tone left the market feeling uneasy."

In addition, the reversal of the cryptocurrency rally was also attributed to the sell-off by whales. According to CoinDesk, a Bitcoin whale sold 24,000 Bitcoins on Sunday, triggering a "flash crash," and this action caused a chain reaction during the thin liquidity weekend period This caused the price of Bitcoin to drop by more than 2% within 10 minutes, reaching a low of $110,500. By Monday afternoon, Bitcoin further retreated to around $110,500, with the increase since 2025 narrowing to about 18%.

Jacob King from WhaleWire pointed out that the actions of the whales triggered panic selling among other traders, exacerbating the downward spiral. This liquidity tightening further worsened against the backdrop of increased leveraged long positions in the previous week.

In comparison to Bitcoin, Ethereum also retraced to $4,400, but its year-to-date increase still exceeds 31%, showing significantly stronger relative performance than Bitcoin.

Whale "Switch": A Strategic Shift of $2.7 Billion

At the core of this market turmoil is a massive reallocation of funds. On-chain analysis shows that the whale account that sold 24,000 Bitcoins still holds 152,874 Bitcoins, valued at over $17 billion, and this investor has held these Bitcoins for more than 5 years.

More critically, the flow of funds is noteworthy. Data shows that after the Bitcoin sell-off, a significant portion of the funds was reinvested into Ethereum. Two entities reallocated $2 billion worth of Bitcoin funds to Ethereum, with 275,500 Ethereum (valued at $1.3 billion) already staked.

Analysts believe that this capital reallocation reflects a broader shift in market sentiment, with investors increasingly optimistic about Ethereum's growing utility in stablecoins, tokenization, and smart contracts.

Jeff Mei from BTSE and Samir Kerbage from Hashdex pointed out that compared to Bitcoin, Ethereum's smaller market capitalization may respond more significantly to potential interest rate cuts by the Federal Reserve and increased systemic liquidity.

According to CoinGlass data, $273 million in Bitcoin positions were liquidated in the past 24 hours, while $296 million in Ethereum positions were liquidated, with the total cryptocurrency liquidation amount reaching $838 million.

Wall Street "Bottom Fishing" Rumors: Institutional Funds Taking Contrarian Positions

Amidst the market's extreme volatility, rumors suggest that Wall Street institutions are seizing the opportunity to bottom fish. Financial blog zerohedge posted on social platform X, stating that Fidelity, Bitwise, and 21Shares have seen significant inflows of funds, and the market is closely monitoring the movements of large asset management companies like BlackRock.

According to rumors, Fidelity has achieved a net inflow of $87 million, Bitwise saw an inflow of $9.7 million, and 21Shares had an inflow of $5.6 million, while the market is still waiting for the latest updates from BlackRock. Although these figures have not yet been officially confirmed, they reflect that institutional investors may be taking advantage of the market pullback to increase their holdings in cryptocurrency assets Another rumor that has drawn attention involves the operations of the market maker Jane Street. It is reported that the company's "momentum deception" operation caused Ethereum to enter a correction less than 24 hours after reaching an all-time high, described as "one of the most brutal operations in history."

However, the overall fund flow of ETFs shows divergence. According to data from Farside Investors, the spot Bitcoin ETF recorded a net outflow for six consecutive trading days as of last Friday, totaling $1.19 billion.

The spot Ethereum ETF previously experienced a net outflow of $925.7 million for four consecutive trading days, but recorded a net inflow of $625.3 million on Thursday and Friday.

Despite the short-term volatility, analysts remain cautiously optimistic about the medium to long-term outlook. Kruger from LMAX stated, "As long as Bitcoin remains above $110,000 on a weekly closing basis, the market is expected to maintain good resilience during the downturn."

Alex Krüger from Aike Capital pointed out that once the short-term volatility calms down and the price breaks through the key resistance level of $113,500 to $114,000, Bitcoin may regain upward momentum.

Options data also shows sustained bullish sentiment. Sean Dawson from the on-chain options platform Derive stated that the market has not been shaken by the pullback, and the fundamentals remain intact. The current 7-day Relative Strength Index (RSI) indicates an oversold condition, but there are no clear reversal signals yet