Why Bitcoin, ETH and Altcoins Plunged This Week: Key Drivers & Signals

This week, the crypto market flipped from early September optimism into steep losses. Bitcoin, Ethereum, and a wide range of altcoins entered a volatile range, with panic selling emerging and large holders taking advantage. In this article, we unpack the four main drivers behind the drop, analyze market sentiment, and point out what traders should watch next.

What Sparked the Crypto Crash This Week

Analyst Ash Crypto highlights four critical causes behind this downturn:

1. $23 billion in options expiring A quarterly expiry of Bitcoin and ETH options triggered position adjustments and volatility. Ash asserts whales may push prices to “max pain” levels—about $110,000 for BTC and $3,700 for ETH.
2. Macro pressure from U.S. government shutdown risk Concerns about a government shutdown before October 1 fueled risk aversion. Strong GDP growth (~3.8%) also dampened expectations of near-term rate cuts—negative for speculative assets.
3. Shifting market sentiment and panic selling Total crypto market cap dropped ~2.1% to $3.76 trillion, while 24-hour volume surged 35%. Fear & Greed Index approached “Fear,” and many tokens (like BNB) entered oversold territory.
4. Retail leverage & cascading liquidations Retail traders were heavily leveraged. A decline forced massive liquidations, amplifying the sell-off. Ash suggests whales might’ve engineered the move to trap overleveraged traders.

• Options expiry causes technical volatility
• Macro uncertainty reduces risk appetite
• Retail overleverage intensifies corrections
• Whales may exploit weak hands and leverage cascade

How Market Structure & Sentiment Shifted

The convergence of technical and macro factors amplified the move. With most positions under stress, sentiment shifted fast from bullish to defensive. The acceleration of volume during decline signals active liquidation rather than passive drift. Whales and institutions appear to have leveraged the setup to their advantage.

• Sharp volume spike during downside move
• Sentiment indicators turned negative
• Leverage amplifies losses for small players

What to Watch Next: Key Indicators & Risks

As the market digests this shakeout, traders should monitor:

• **Next options **expiries: how they might influence price
• Macro developments: especially U.S. politics, shutdown risks, and interest rate signals
• Liquidation metrics in derivatives markets: to see if cascading continues
• Support zones: whether BTC, ETH can hold near recent lows

Conclusion

The steep drop in Bitcoin, Ethereum, and altcoins this week reflects a combination of derivatives expiry pressure, macro risk, overleveraged retail behavior, and big players exploiting volatility. While the shakeout is painful, it may reset the landscape — positioning the market for more stable direction once volatility subsides. Traders should stay vigilant of options flows, macro signals, and leverage conditions going forward.