Ether Treasury Firms Under Pressure as Liquidations Mount and Support Levels Crumble

When the crypto market decides to throw a tantrum, it does not do half measures. Ether’s slide below $2,000 is not just a chart event, it’s a full-blown existential crisis for the so-called ‘treasury’ firms that built their business models on endless up-only price action. Tom Lee’s Bitmine, now $8 billion underwater, is the poster child for what happens when leverage, hubris, and a stubborn refusal to hedge collide with reality.

The facts are ugly. Ether’s price has cratered, dragging Bitmine’s mark-to-market losses into the billions. The firm insists it is under no pressure to sell, but the market is not buying it. Liquidations are stacking up across DeFi lending protocols, and the forced unwind is feeding on itself. The headlines are relentless: “Bitmine now $8 billion underwater,” “Ether tumbles below $2,000,” and “Liquidation risk surges as crowded longs get squeezed.” This is not just another crypto correction. This is a stress test for the entire ether-backed treasury model.

Zoom out, and the context gets even more uncomfortable. The last time ether broke below a major support level, the dominoes fell fast. DeFi TVL shrank, stablecoin pegs wobbled, and the entire ecosystem went risk-off. This time, the macro backdrop is even less forgiving. The so-called ‘Warsh Shock’ has triggered a massive liquidity exodus, and the crypto market is feeling the squeeze. Bitcoin’s plunge below $70,000 has set the tone, but ether is where the real pain is concentrated. The forced selling is not just a function of price, it’s a function of leverage, and there’s still a lot of it left to unwind.

The analysis is brutal but necessary. The treasury model worked when prices only went up and funding was cheap. Now, with rates higher and liquidity drying up, the cracks are showing. Bitmine’s refusal to sell is a double-edged sword: on one hand, it avoids crystallizing losses; on the other, it risks becoming a forced seller if the market keeps sliding. The feedback loop is vicious. Each new leg down triggers more liquidations, which triggers more selling, which triggers more panic. The market is looking for a bottom, but the forced unwind means it could be a while before stability returns.

Cross-asset correlations are telling their own story. Ether’s correlation with risk assets has spiked, and the market is trading like a high-beta tech stock on a bad day. The old narrative of crypto as an uncorrelated asset is dead, at least for now. The only thing that matters is liquidity, and right now, there isn’t enough of it.

Strykr Watch

Technically, ether is in no-man’s-land. The break below $2,000 was the line in the sand for a lot of leveraged longs, and the next real support is down at $1,800. If that goes, look out below. The 200-day moving average is now overhead resistance, and momentum indicators are deeply oversold but not yet at capitulation levels. RSI is scraping the bottom, but volume is still skewed to the sell side. The liquidation cascade is not finished.

On-chain data shows a spike in liquidations across major DeFi protocols, with lending platforms seeing collateral ratios fall dangerously close to trigger levels. Stablecoin outflows are accelerating, and the ETH/BTC ratio is plumbing new lows. The only silver lining is that funding rates have flipped negative, which could set the stage for a short squeeze if the market finds its footing. But for now, the path of least resistance is down.

The risk is that Bitmine and other treasury firms become forced sellers if the market doesn’t stabilize soon. The longer prices stay below key support, the greater the risk of a disorderly unwind. Watch for signs of capitulation, spiking volume, negative funding, and a flush in open interest. Until then, caution is warranted.

The opportunity, if you can stomach the volatility, is on the short side. Fading any bounce into resistance is the high-probability play until the liquidation wave exhausts itself. For the brave, a reversal play is possible if the market shows signs of true capitulation, but tight stops are a must. The risk/reward is skewed to the downside until proven otherwise.

Strykr Take

This is a market that punishes complacency and rewards discipline. The forced unwind in ether is not over, and the treasury model is being put to the test. Don’t try to catch the falling knife, wait for the blood to stop running before stepping in. For now, the bears are in control.