Key Takeaways
Bitcoin took a $300 million+ long squeeze after a whale rotation into ETH. Are smart money flows now leaning toward ETH over BTC this September?
Bitcoin’s [BTC] September run just hit some turbulence.
Historically, September leaned bearish for BTC. BTC closed red in eight of the last 12 Septembers.
Add the next FOMC meeting in 23 days, and volatility looked inevitable.
Now, this theory is starting to play out in real time. Whales are rotating into Ethereum [ETH], dragging BTC back toward $112k support.
Given this flow, is smart money starting to favor ETH’s upside over BTC’s short-term grind?
Bitcoin’s flash crash exposes weak support
The last 24 hours delivered a classic Bitcoin “flash crash.”
BTC pulled nearly 5%, with a low wick down to $110k, marking the first failed attempt by bulls to defend support. This break in structure triggered stop runs, leaving the market exposed to a deeper pullback.
The blowup?
The largest single liquidation hit OKX’s BTC-USDT-SWAP for $12.49 million, with total liquidations hitting $257 million, 94% of which were long-side stops getting swept, draining rebound momentum.
Source: TradingView (BTC/USDT)
Simply put, Bitcoin’s early-August-style rebound off $111k fizzled.
Back in early August, a similar pullback sparked a 10% rally to $123k. Bulls chased a repeat, driving a 3.27% pump on 22 August from $111k.
But the bounce didn’t stick. Instead, it triggered a deeper correction, running stops on late longs, and driving the first leg down to $110k.
Having said that, the bigger concern was: Is September volatility now shaking out conviction?
Whale rotation raises alarms
Whales selling into weakness usually mark Bitcoin’s top.
Notably, BTC’s flash crash liquidated $310 million in longs, but it didn’t serve as a “healthy” reset. A single whale offloaded 24k+ BTC, including coins dormant for 5+ years, sending 12k+ BTC to Hyperunite alone.
The bigger story: Most of the proceeds are rotating into ETH. Traders have bought roughly $2 billion worth of ETH and staked $1.3 billion, signaling a major shift in smart money flow.
Source: TradingView (ETH/BTC)
Backing this, the ETH/BTC ratio is flashing relative strength. It is up 10.5% this week, breaking 0.04 resistance for the first time since the election cycle.
That’s a strong signal that ETH is outperforming BTC.
Performance divergence backed the narrative.
BTC lost 3% for August so far, while ETH gained 25%. On top of that, with September often bearish for BTC and the FOMC looming, capital increasingly favored Ethereum.
All in all, this whale rotation isn’t a one-off. It points to waning BTC conviction, active capital rotation, and sets up a structurally bearish September for Bitcoin.
