Bitcoin and Ethereum sold off over the weekend as U.S. President Donald Trump hinted at a possible attack on Iran. AMBCrypto argues the leverage flush and a falling ETH exit queue could set Ethereum up to outperform Bitcoin in November.
Bitcoin crashed below $80k and ETH slipped below $2.3k as Trump hinted at the possibility of the U.S. attacking Iran. AMBCrypto says the drop may be the kind of weekend washout that clears the way for a relief bounce.
Traders are treating the move as a washout heading into the weekend, when thinner order books raise sell pressure. If high-cap assets break below key support, longs can be liquidated in a chain reaction, according to the report.
Leverage flush clears altcoin positions
Altcoin open interest is down almost $9 billion from its local peak, which shows leverage is already getting flushed out, AMBCrypto says. Even so, Ethereum is nearing a major whale liquidation zone, so downside risks remain in play.
Oil adds to the risk-off mood. Brent crude rallied 2.8% intraday to hit $118/barrel, its highest level since 2022.
However, the market isn't pricing in an actual attack. If geopolitical fears fail to escalate, Bitcoin and Ethereum could bounce as sidelined buyers step in.
ETH/BTC ratio tests 0.28 support
The ETH/BTC ratio is approaching a potentially fifth straight lower low, with the wick pushed back toward earlier August levels of 0.28. That level produced a near 15% rally when last tested.
On the supply side, the validator entry queue is up by more than 11%, adding about 140k ETH to the staking queue. The exit queue has fallen over 99% from its peak of 282k ETH to just 3.5k ETH, which AMBCrypto reads as a significant decrease in unstaking pressure.
AMBCrypto suggests the growing staking queue could represent early positioning for an August-style ETH/BTC breakout, which would put the ratio in position for a potential November rally.
Source: AMBCrypto
Trading involves risk.
Risk Disclaimer
