Crypto Drops 3% on Overbought Market, ETF FOMO and Macro Risk
The crypto market fell by nearly 3% on August 18, wiping out about $140 billion and pushing total capitalization down to $3.88 trillion. Bitcoin slid from an all-time high of $124,457 to around $115,300, while Ethereum tumbled below $4,300. The pullback followed record inflows—$2.85 billion into spot ETH ETFs and $547 million into spot BTC ETFs—fueling a FOMO-driven rally that left the crypto market overbought. Sudden DeFi TVL expansions, from $129 billion to $160 billion, further amplified volatility. Over $530 million in liquidations over 24 hours, led by $210 million in ETH, underscore the market’s fragility. Looking ahead, key macroeconomic events—including U.S. CPI data, Federal Reserve minutes, a Powell speech, and geopolitical meetings—may intensify trading swings. Traders should watch for potential support near current levels and prepare for continued volatility as these catalysts unfold.
Bearish
This news is bearish because it highlights a sharp 3% market downturn driven by overbought conditions, FOMO-fueled ETF inflows and looming macro risks. Similar to previous overbought cycles in late 2021, massive ETF inflows spurred rapid gains that quickly reversed once sentiment peaked. The sizeable liquidations and DeFi TVL surge underscore heightened fragility. In the short term, traders may face continued volatility as U.S. CPI data, Fed minutes and geopolitical events act as catalysts. Over the long term, while these corrections can offer buying opportunities, persistent macro uncertainty and potential policy shifts suggest cautious positioning until clearer trends emerge.