Crypto Market Dips $319 Million in Liquidations Amid Bearish Sentiment

• The crypto market faces a sharp downturn, $319M liquidated, and total market cap drops 7%.
• Bitcoin’s drop below support levels sparks bearish sentiment, major altcoins hit hardest.
• Outflows from U.S. Bitcoin and Ether ETFs intensify, signaling investor caution and market uncertainty.

The crypto market faced a sharp downturn, with over $319 million liquidated in the past 24 hours. The total market capitalization dropped by 7%, standing at around $2.17 trillion during early trading hours on Wednesday, August 28. 

This decline was triggered by Bitcoin (BTC) falling below crucial support levels on Tuesday, fueling a wave of bearish sentiment that rippled through the altcoin sector. Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) were among the most impacted. Over 90% of the liquidations came from long positions, reflecting a widespread pessimistic outlook among investors.

With August approaching, concerns over a potential market capitulation in September have intensified. Historical data indicates that Bitcoin has often struggled during August and September, particularly following a halving event. 

Recently, short-term Bitcoin holders have offloaded over 33,000 BTC, suggesting a lack of confidence in near-term price stability.

Significant cash outflows from U.S. Bitcoin and Ether exchange-traded funds (ETFs) have further contributed to the bearish atmosphere. Despite initial inflows to BlackRock’s IBIT, a substantial outflow of approximately $127 million was recorded, primarily from the ARK 21Shares Bitcoin ETF. 

Concurrently, U.S. spot Ether ETFs marked their eighth consecutive session of outflows, with Grayscale’s ETHE leading the decline. Tuesday alone saw a net outflow of $3.45 million from Ether ETFs, bringing the total outflows to around $482 million.

Ethereum’s price has also been under pressure despite forecasts of potential interest rate cuts in the United States next month. Notable market analyst Peter Brandt highlighted a confirmed bearish pattern for ETH, driven by consistent closes below the $2,814 support/resistance level. 

Brandt pointed out the formation of a double-top pattern and bearish divergence on the weekly Relative Strength Index (RSI), signalling further downside potential.

Meanwhile, Bitcoin continues to consolidate within an inverted triangle pattern, with expectations that this trend may persist until the fourth quarter. Analysts predict that market bulls might regain momentum later in the year, but uncertainty and caution prevail across the cryptocurrency landscape for now.