Risk assets are pulling back over the weekend. Is this more than just a coincidence?
With U.S. President Donald Trump hinting at the possibility of the U.S. attacking Iran, the market has become highly volatile. Bitcoin crashed below $80k, while ETH slipped below $2.3k.
However, traders are shrugging off the drop as a “strategic” washout as it goes into the weekend. As order books thin, sell pressure increases. If high-caps break below key support, this causes longs to be liquidated in a chain reaction.
Thus, this could be just another weekend dump. Supporting this, Altcoin Open Interest (OI) is down almost $9 billion from its local peak, showing that leverage is already getting flushed out.
Meanwhile, Ethereum is nearing a major whale liquidation zone, keeping downside risks in play.
But if this is merely a weekend liquidity sweep, could the leverage flush set the stage for a relief bounce?
From a technical perspective, the increase in oil prices is contributing to the risk-off sentiment, with Brent crude rallying +2.8% intraday to hit $118/barrel, its highest level since 2022.
This has caused Bitcoin [BTC] and Ethereum to see a significant weekend selloff, with low liquidity causing increased negative sentiment. This has then led to a larger leverage flush.
However, the market isn’t pricing in an actual attack. So, Monday could bring a bullish surprise. With “weekend” volatility flushing out excess leverage, the market could be better positioned to stage a relief rally once liquidity returns.
So, if geopolitical fears fail to escalate, Bitcoin and Ethereum could bounce as sidelined buyers step in and bearish positioning unwinds.
In short, there is some real weight to the weekend manipulation story here. But given that altcoin OI is down $9 billion from its local highs, the market has already seen heavy deleveraging.
So, with other on-chain data in play, could this leveraging set the stage for ETH to outperform BTC in November as macro FUD builds?
Can Ethereum outperform Bitcoin after a major altcoin leverage flush?
The ETH/BTC ratio is at a key inflection point.
Technically, the ratio is approaching a potentially 5th straight lower low. The sustained downtrend has pushed the wick back towards earlier August levels of 0.28.
This level is a significant support level, as it produced a near 15% rally when last tested. With leveraged positions being squeezed out, could we see ETH/BTC bouncing back again?
On the supply side of things, Ethereum is putting together a bullish case. As the chart below shows, the validator entry queue is up by more than 11%, increasing the staking queue by about 140k ETH. At the same time, the exit queue is down over 99% from the peak of 282k ETH to just 3.5k ETH.
This indicates that there has been a significant decrease in unstaking pressure.
Thus, Ethereum [ETH] is showing signs of rising conviction despite the broader risk-off market.
This is significant given Bitcoin has hit its 60% ceiling and is beginning to consolidate. Macro FUD is coming back, and investors are being cautious with BTC. However, with altcoin leverage being squeezed out of the market, ETH could be shaping up as an attractive “risk-reward” play.
In this setup, the growing ETH staking queue looks far from random. Instead, it could represent early positioning for an August-style ETH/BTC breakout, which would put the ratio in position for a potential November rally.
This makes Ethereum a relatively attractive dip-buying play.
Final Summary
- The ETH/BTC ratio is near 0.28, where it previously rallied nearly 15%, while rising ETH staking signals stronger conviction.
- With $9 billion in altcoin OI wiped out and BTC dominance facing resistance near 60%, ETH could be gearing up to outperform BTC.