Crypto Absorbs Largest Liquidation Shock of 2025, Analyst Urges Caution
Crypto markets faced their largest liquidation shock of 2025, witnessing the heaviest single-day wipeouts since summer 2023 for Ethereum (ETH) and Solana (SOL), and the biggest since June for Bitcoin (BTC). This triggered a sharp, sentiment-driven downdraft across major cryptocurrencies and large-cap altcoins.
In a video analysis published today, analyst CryptoInsightUK urged restraint, suggesting that the move resembles a leverage flush rather than a structural break. He pointed to liquidity maps, momentum gauges, and market-cap composites that, in his view, still skew constructive once the dust settles.
“Do not rush and panic this morning,” he said at the outset. “The only rush and panic thing that you should be doing at this time is if you just want to buy spot. Nothing has really changed at all.”
### Market Context and Recent Highs
He framed the sell-off against near-all-time-high closes last week across market-cap aggregates:
– Total2 (ex-BTC) closed at about $1.66–$1.67 trillion,
– Total3 (ex-BTC, ex-ETH) at $1.13 trillion,
– Total crypto market cap just shy of $4 trillion at $3.96 trillion.
The message? Zoom out, assess structure, and watch for a familiar bottoming sequence that typically follows abrupt long liquidations.
### Short-Term Roadmap: Classic Liquidity Sweep and Momentum Divergence
The analyst’s short-term roadmap hinges on a classic liquidity sweep plus momentum divergence. After a vertical wick clears resting bids and triggers stops, he anticipates price to chop, revisit, and marginally undercut the intraday low while the RSI forms a higher low.
“What we’re looking for structurally is a higher low on the RSI, perfect if it’s in the oversold area. When we have a higher low on the RSI and a lower low in price action, the momentum of the selling is waning,” he explained, calling this setup a reliable reversal signal. “The higher the timeframe, the better.”
### Crypto Watch: ETH, XRP, DOGE, ADA
He cited fresh examples across majors:
– **Ethereum (ETH):** A drawdown from about $4,400 to $4,000 sliced through a dense cluster of below-price liquidity that had accumulated for weeks. “This is the first time we’ve seen more liquidity above us than we have below since the prior five-wave advance,” he noted, interpreting this as consistent with an ABC correction that may be maturing.
– **XRP:** It pinpointed its only notable pocket of sub-price liquidity, wicking to $2.66, mapped against $2.8–$2.69. He now sees the main liquidity above at $3.40 for XRP, allowing that a brief wick-fill toward today’s low could complete the divergence pattern he’s monitoring.
– **Bitcoin (BTC):** The dominance spike during the flush aligns with his playbook. He described the dominance RSI as massively overbought, “probably like on the hourly as overbought as I’ve seen it,” noting that prior moves into this zone have coincided with local peaks in BTC relative strength before rotation back into large caps and selective alts. This context, together with his zoomed-out view, underpins his claim that bullish sentiment will be rewarded over time—even if the path includes unnerving resets.
– **Dogecoin (DOGE):** While DOGE reclaimed support around $0.22, he cautioned it can still probe the $0.19–$0.20 zone. He flagged the 4-hour RSI as being as depressed as at prior cyclical lows. He disclosed a 2x DOGE long position around $0.225, with no hard stop due to his conviction in the higher-timeframe trend and acceptance of potential further volatility.
– **Cardano (ADA):** It wicked into a mapped liquidity shelf near $0.77, with main liquidity zones at $1.00 and $1.20 on the daily chart—a configuration he views as asymmetrically favorable once the market stabilizes.
### What to Watch Now
Throughout the analysis, the emphasis is clear: today’s damage was amplified by leverage, not fundamentals. “We’ve had a liquidity flush,” he said, referencing a social post that estimated a billion dollars of leverage was flushed out in 30 minutes.
For him, this is positive. “We want to see this leverage reset.”
He cautioned that near-term direction is hostage to U.S. cash-market flows. “The U.S. might wake up and sell, or buy the dip,” he said, but insisted that the larger structures remain intact:
“Weekly, we’re still sitting at all-time highs. Whether the tops are in or not, I don’t think so. I really, really, really, really, really don’t think so.”
His near-term checklist is straightforward: let volatility run its course, look for the RSI higher-low against a marginal price lower-low, and respect predefined support and target zones.
“Take your emotion away and look for structures that you know are bottoming structures,” he advised.
Trader psychology, he added, is as critical as the levels. “These things happen and it feels like a culmination of sentiment: anger, frustration, and now probably despair. If it’s too much, go for a run.”
He reminded that the market doesn’t care about emotions and will do what it will do anyway.
### The Road Ahead
If the real storm is still to come, it lies in the post-flush move—whether that means a final liquidity sweep completing the divergence or a swift rotation lifting majors into overhead liquidity he has mapped.
Either way, he argues, the decisive phase is ahead, not behind:
“Let’s see how things play out. It’s not a time to panic. If you want to be buying things when we’re oversold like this, it’s a decent time to buy.”
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At press time, ETH traded at $4,185.
*Featured image created with DALL·E; chart sourced from TradingView.com.*
https://www.newsbtc.com/news/crypto-bloodbath-real-storm-still-to-come/
