August 26, 2025 By Dr. Sean Dawson
It’s been a bloody start to the week for the majors, with over $900 million in liquidations across crypto markets. The majority came from ETH ($324 million) and BTC ($209 million) and nearly all were long positions forced underwater after a broad-based correction.
Liquidation heatmap
Source: Coinglass
This sharp move appears to be the result of overleveraged positioning, particularly following ETH’s recent run-up, and an overnight dip in the S&P 500, which weighed on risk assets more broadly.
In response, short-dated volatility has spiked sharply across the board. Daily BTC volatility jumped from 15% to 38%, while daily ETH volatility surged from 41% to 70%. These moves reflect rising trader anxiety ahead of key macroeconomic catalysts, notably US GDP figures due to be released August 28 and the unemployment rate to be released early September.
BTC ATM Volatility
Source: Derive.xyz, Amberdata
We’ve also seen a clear shift in sentiment. For example, the 25-delta skew has turned negative for both BTC and ETH, indicating a preference for puts over calls. This is the strongest demand for downside protection we’ve seen in two weeks. Traders appear to be bracing for potential retests of $4K for ETH and $100K for BTC.
BTC 25 delta skew
Source: Derive.xyz, Amberdata
ETH 25 delta skew
Source: Derive.xyz, Amberdata
Finally, price predictions have shifted accordingly:
- BTC $100K by end of September: odds up from 20% to 35%ETH $4K retest by end of September: odds now just over 55%
“With macro pressure building and volatility spiking, markets are resetting fast, and the path ahead could be bumpier than many were positioned for.”
