At 14:00 on September 22, BTC fell below $114,000 and rapidly lost further round-number support levels, briefly dipping to $111,800 before stabilizing near $112,600. ETH dropped from around $4,500 to as low as $4,077, while SOL hit a low of $214.5. Major and altcoins experienced widespread significant pullbacks.
According to CoinGecko data, as of 18:00 on September 22, the global cryptocurrency market cap stood at $3.97 trillion, with a 24-hour change rate of -3.98%. This translates to a loss of nearly $160 billion in total market value.
Latest liquidation data indicates approximately $1.7 billion in positions were liquidated across exchanges over the past 24 hours, affecting over 400,000 traders. Long positions accounted for roughly $1.616 billion of this, marking the highest single-day liquidation of long positions since 2021. The largest single liquidation occurred on OKX’s BTC-USDT futures contract, totaling approximately $12.74 million.
Amid this sharp pullback, is this merely a technical correction or a structural inflection point?
Market Sentiment Shows Clear Divergence
Amid the steep decline, market sentiment reflects two opposing forces. One trader views this as the final shakeout before a bull run, suggesting BTC could test the $112,000 level, while altcoins may need to fall 20-30% before stabilizing. Another trader cautioned that BTC faces the highest risk of a secondary decline within the $115,000-$116,000 range. Without fresh capital inflows before October, fourth-quarter volatility could intensify.
Optimists emphasize positioning and rotation. Some view this decline as a routine September pullback, noting that rapid rebounds after breaching key levels are common and can create buying opportunities. They point out Bitcoin’s dominance rate has fallen to around 58%, with capital flowing from BTC into sectors like AI, DeSci, RWA, and DePIN, suggesting smaller-cap assets will show stronger resilience later.
On-chain metrics and capital flows also show tension. Monitoring data indicates that before the crash, addresses associated with Trend Research redeemed 16,800 ETH—nearly liquidating their holdings—while some institutional funds withdrew liquidity first. Amid the broader market decline, another whale deposited 15 million USDC into HyperLiquid, opening 20x leveraged long positions in BTC and SOL alongside 10x leveraged long positions in HYPE. The total position size reached approximately $26 million, indicating some capital is betting on a rebound at these lows. Amidst the panic selling, counter-trend behavior persists: another whale dumped 1,000 ETH. This address has consistently followed a contrarian pattern over the past two months—buying high and selling low—reflecting emotional trading rather than systematic selling pressure.
In fact, on-chain capital had already shown movement before the crash. On September 18th, whales holding Ethereum liquidated a total of $2.15 billion in a single day. However, Matrixport maintains a cautious stance on Ethereum, noting that while the risk-reward ratio for long positions was previously favorable, technical indicators can become unreliable during rapid upward movements. A similar large-scale cash-out occurred in July when ETH broke above $3,500, but it didn’t trigger a price pullback due to purchases by some U.S. treasury firms. Currently, treasury firms remain the primary buyers. However, as their net assets shrink with falling prices, their ability to inject additional capital may be constrained, weakening the strength of marginal buying. Short-term risk management should take precedence.
Additional perspectives include Glassnode’s BTC cost distribution heatmap identifying the $117,000 level as a supply-heavy zone. A sustained break above this threshold could unlock further supply reduction, while failure to breach it suggests prolonged consolidation or recurring pullbacks. On the timeframe, Weiss Crypto’s analysis leans toward a 30-60 day sideways phase, with mid-October appearing more likely for a potential interim low.
Alphractal founder Joao Wedson noted that Bitcoin has shown signs of cyclical exhaustion, though few have noticed. Multiple on-chain signals suggest Bitcoin’s rally may have lost momentum. The Spent Output Profit Ratio (SOPR), a metric measuring the overall profitability of all spent Bitcoin transactions on the blockchain, indicates declining profitability, increasing the likelihood of a deeper pullback. The Sharpe ratio has fallen below 2024 levels, indicating reduced risk-reward and profit potential. He further noted this scenario won’t attract significant institutional investment as widely anticipated. Even if Bitcoin hits new highs, profitability will remain low, shifting the true focus toward altcoins.
Why Did the Market Fall?
Multiple explanations circulate for today’s crash, which boil down to three key factors:
First, passive deleveraging in derivatives triggered the crash. Overcrowded long positions on major exchanges led to consecutive liquidation hotspots after key support levels broke, causing a cascade of liquidations. Corresponding data shows approximately $1.7 billion in liquidations over 24 hours, with ETH liquidations exceeding BTC—explaining why high-beta assets and ETH fell faster.
Second, options structures exerted concurrent pressure. Market sources indicate this Friday’s expiring BTC options had a notional value of approximately $17.47 billion with maximum pain points around $110,000; ETH options held a notional value of roughly $5.48 billion with maximum pain points near $3,700. The elevated pain point range increased the probability of repeated price tests.
Third, this represents a pullback following the realization of macro expectations. The Fed’s 25-basis-point rate cut has been priced in, and the rally since early September extended to $117,900 after the decision. Subsequently, the market entered a phase of profit-taking and data-watching. Additionally, with PCE data and official speeches scheduled this week, traders are inclined to reduce leverage before determining the next direction. This resembles a procedural position reduction rather than a single black swan event.
Furthermore, comments from BitMEX co-founder Arthur Hayes injected some negative sentiment into the market. He stated that we are entering the midpoint of this cycle. Those who bought just six months ago, focusing only on a few-month window, might be disappointed. However, those who allocated years ago are now seeing significant gains, far outpacing the depreciation of the USD and other fiat currencies. Therefore, there’s no need to get emotional just because Bitcoin isn’t setting new all-time highs every day. He further predicts that a major “DAT” incident will occur at the cycle’s bottom—similar to FTX’s collapse or BlockFi’s troubles during previous troughs—potentially involving a 70% retracement from Bitcoin’s $100,000 peak.
