Altcoin Carnage: Ethereum Eyes $900 as Bitcoin Crash Triggers $1.5 Billion Liquidation Wave

If you thought crypto winters were a thing of the past, this week’s bloodbath in altcoins is a rude awakening. Bitcoin’s -7% intraday plunge to $65,253 on Bitstamp was just the opening act. Ethereum, the perennial second fiddle, is now staring down the barrel of a possible capitulation to $900. The carnage didn’t stop there: over $1.5 billion in liquidations swept through the market, with altcoins taking the brunt of the pain. XRP, Solana, and the rest of the usual suspects are all bleeding out, but it’s Ethereum’s slow-motion collapse that’s got traders glued to their screens.

The numbers are ugly. Bitcoin’s drop below $66,000 triggered a cascade of forced selling, with leverage getting flushed and on-chain data showing capitulation spikes. Ethereum, meanwhile, is stuck in a high-timeframe range with downside risk building. According to crypto.news, the 21-week EMA is weakening, and the next support is all the way down at $900. The Relative Strength Index (RSI) for Bitcoin has cratered to 17, a level seen only at the 2018 bear market bottom and the 2020 Covid crash. Altcoins are even more oversold, with XRP trading near $1.22, down from last summer’s peak.

The narrative has shifted from “when moon” to “where’s the bottom?” Prediction markets are now pricing in Bitcoin stability, not explosive upside, for early 2026. The days of easy gains are over. The forced liquidation event was the third-largest in crypto history, and the market’s collective risk appetite has vanished. Even institutional confidence, which held up better in Bitcoin, is nowhere to be found in the altcoin space.

Context matters. The last time Ethereum flirted with sub-$1,000 levels, it was 2022 and the market was reeling from the FTX implosion. This time, there’s no single villain, just a slow bleed as leverage gets wrung out and sentiment hits rock bottom. The difference now is that on-chain data shows some stabilization in Bitcoin, but Ethereum and the altcoin complex are still in free fall. The ETF narrative has faded, and the market is searching for a new catalyst.

Cross-asset correlations are breaking down. U.S. equities are flat, with the S&P 500 and Nasdaq refusing to move. Commodities are treading water. The only thing moving is crypto volatility, and it’s moving in one direction. The safe-haven bid in bonds is a sign that risk appetite is evaporating across the board.

The real story here is that altcoins are facing a crisis of confidence. Ethereum’s fundamentals haven’t changed, but the technicals are a train wreck. The 21-week EMA is rolling over, and the RSI is deep in oversold territory. If Ethereum loses the $1,000 handle, the next stop is $900, a level that would have been unthinkable six months ago. XRP’s legal clarity hasn’t helped, with U.S. institutions still reducing direct holdings. The forced selling isn’t just retail panic, it’s systematic deleveraging across the board.

Strykr Watch

For Ethereum, the $1,000 level is the last line of defense. A break below opens the door to $900, where the next major support sits. The 21-week EMA is now resistance, and the RSI is so oversold that a violent bounce is possible, but don’t count on it until the selling exhausts itself. For Bitcoin, $65,000 is the pivot. If it holds, the market could stabilize. If not, the next stop is $60,000. Altcoins are in free fall, with no clear support until sentiment reverses.

Watch on-chain flows for signs of stabilization. If stablecoin inflows pick up, it could signal bottom fishing. But for now, the path of least resistance is lower. The liquidation cascade has reset leverage, but the market isn’t done punishing late longs. Prediction markets are signaling a period of stability, not a V-shaped recovery.

The risks are obvious. If Bitcoin loses $65,000, the entire crypto complex could see another leg down. Ethereum’s capitulation to $900 is not just a technical possibility, it’s a real risk if the forced selling continues. Regulatory headlines could add fuel to the fire, especially if U.S. institutions keep reducing exposure to altcoins. The ETF pipeline is dry, and there’s no narrative to rescue prices in the short term.

For traders with an appetite for pain, the opportunities are on the short side. Short Ethereum with a stop above $1,100, targeting $900. For Bitcoin, fade any weak bounce to $68,000 with a tight stop. If you’re looking for a reversal, watch for a capitulation wick and a spike in stablecoin inflows, those are your signals for a tactical long. But keep position sizes small, this is a market that punishes overconfidence.

Strykr Take

This is not the time to be a hero in altcoins. The path of least resistance is still lower, and the technicals are a mess. Wait for a real capitulation signal before stepping in. Until then, respect the trend, it’s not your friend, it’s your boss.

Date published: 2026-02-05 20:00 UTC