In the latest cryptocurrency market update, significant volatility has gripped Bitcoin (BTC) and Ethereum (ETH), leading to substantial liquidations and extending recent drawdowns. According to a report from QCP group, over $400 million in long positions were liquidated overnight as BTC slid from 118,000 to 115,000, while ETH dropped from 4,500 to 4,300. This rout builds on last week's 5% decline in BTC, accompanied by more than $1 billion in DeFi liquidations, highlighting the fragility of leveraged positions in the current market environment.

BTC Price Movement and Trading Implications

Traders should closely monitor BTC's price action around these levels, as the drop from 118,000 to 115,000 represents a critical support test. This movement, occurring overnight on August 18, 2025, underscores the risks of overleveraged longs amid broader market corrections. With BTC experiencing a 5% drawdown last week, the cumulative pressure has led to heightened volatility, potentially signaling a bearish continuation if 115,000 fails to hold as support. From a trading perspective, key resistance now sits at 118,000, where sellers may re-enter on any bounce. On-chain metrics, such as increased liquidation volumes exceeding $400 million, suggest a flush-out of weak hands, which could pave the way for a rebound if buying interest emerges. However, without real-time data confirming stabilization, traders are advised to watch trading volumes on pairs like BTC/USDT, where spikes above average could indicate reversal potential. Institutional flows remain a wildcard, with DeFi liquidations surpassing $1 billion pointing to reduced liquidity in decentralized protocols, potentially correlating with stock market sell-offs that often influence crypto sentiment.

ETH Drawdown and Support Levels

Ethereum (ETH) mirrored BTC's decline, falling from 4,500 to 4,300 in the same overnight session, exacerbating the market-wide rout. This price slide extends the DeFi sector's woes, where over $1 billion in liquidations have amplified selling pressure. For ETH traders, the 4,300 level emerges as immediate support, with a breach potentially targeting 4,000 based on historical patterns. Resistance at 4,500 could cap short-term recoveries, making it essential to analyze multiple trading pairs such as ETH/BTC and ETH/USDT for relative strength indicators. Market indicators like the RSI on hourly charts likely show oversold conditions post-liquidation, offering scalping opportunities for agile traders. Broader implications include impacts on AI-related tokens, as ETH's role in smart contracts ties into emerging AI integrations in blockchain, potentially affecting sentiment if the drawdown persists. With no current market data available, focusing on sentiment reveals a cautious outlook, where institutional investors might view this as a dip-buying chance amid correlations with global equity markets.

Overall, this event emphasizes the need for robust risk management in cryptocurrency trading. The overnight liquidations of over $400 million highlight how quickly sentiment can shift, extending last week's BTC drawdown and DeFi turmoil. Traders should consider hedging strategies, such as options on BTC and ETH, to mitigate downside risks. Looking ahead, if support levels hold, a relief rally could ensue, driven by reduced leverage and potential inflows. However, persistent selling might correlate with stock market weaknesses, creating cross-market trading opportunities. For instance, monitoring S&P 500 futures alongside BTC could reveal arbitrage plays. In summary, while the immediate outlook is bearish, these liquidations often precede consolidations, providing entry points for long-term holders. Always verify on-chain data and volume trends before executing trades to capitalize on these dynamics.