ETH Price Crash: Drop Below $4,000 Could Trigger $1 Billion In Liquidations

Cryptocurrency

Summary:

Ethereum (ETH), the second-largest cryptocurrency, has seen a sharp pullback, dropping nearly 5% to around $4,270. The dip came as traders reacted to global economic news, shifting Federal Reserve expectations, and a wave of liquidations that shook the market.

With ETH now hovering around $4200, a drop could lead to $1 billion in liquidation and more, which could lead to a massive sell-off in the cryptocurrency market.

Why $4,000 Is The Breaking Point?

After the Ether price dropped to $4200, $4,000 has become a critical support zone for Ethereum. Data from liquidation trackers shows that in the last 24 hours, over $536 million in crypto positions were liquidated, with Ethereum leading the wipeout at $212.9 million.

This brought panic among the investors, especially the long-term investors, as it led to a massive sell-off, leading the Eth price to crash harder.

However, the danger isn’t over, data show that if the ETH price slips further under $4,000, cascading liquidations could put as much as $1.19 billion at risk.

Mechanism Capital’s founder, Andrew Kang, even warned that ETH could crash toward $3,200–$3,600 if long positions keep getting wiped out, which will further lead to $5 billion in liquidation.

ETF Outflows & Whale Moves Add Pressure

Ethereum is also seeing pressure from institutional investors. On August 15, ETH spot ETFs recorded $59.3 million in outflows, signaling that big funds are pulling back after weeks of steady inflows.

At the same time, a large whale transferred 12,202 ETH (worth $54 million) to exchanges, hinting at profit-taking after last month’s 19% rally. These moves have added more selling pressure to an already fragile market.

Overall Crypto Market Is Struggling

Ethereum’s decline comes as the overall crypto market struggles. Bitcoin has dropped nearly 3% to $115,000, weighing heavily on altcoins and DeFi tokens. Since ETH often sets the tone for the broader market, a sharp breakdown here could trigger a wider sell-off across the industry.

For now, all eyes remain on the $4,000 support level. If Ethereum holds above it, stability may return. But if it breaks, the market could be staring at one of the biggest liquidation waves of the year.

Source: CryptoSlate

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Winkelmann

Economic

Stocks

Tesla has long been recognized as a pioneer in electric vehicles (EVs), but founder and CEO Elon Musk's ambitions extend far beyond selling cars.Two of Tesla's most audacious projects -- fully autonomous robotaxis and the humanoid Optimus robot -- could reshape the company's long-term growth trajectory.While both are still in development, their potential markets are enormous, and success in either could materially shift Tesla's business model from car manufacturing to high-margin services.

The robotaxi opportunity

Tesla has promised that once its Full Self-Driving (FSD) technology reaches true autonomy, it will launch a fleet of robotaxis -- either operated by Tesla itself or run by owners on a ride-hailing network. The appeal is obvious: eliminate the human driver, and the economics of ride-hailing change dramatically. Margins could jump, utilization rates could soar, and the addressable market could rival that of the world's largest mobility companies.According to MarketsandMarkets, the global robotaxi market is expected to grow from approximately 617 units in 2021 to roughly 1.45 million vehicles by 2030, reflecting a compound annual growth rate (CAGR) exceeding 130%. In terms of revenue, Fortune Business Insights projects that the market will grow from approximately $1.7 billion in 2022 to around $108 billion by 2029, representing an 80.8% CAGR over the forecast period.

While these figures reflect long-term ambition more than near-term earnings, they underscore the potential scale Tesla is chasing. Moreover, the tech company has taken steps to reach its long-term ambition. In June of 2025, Tesla quietly launched a limited robotaxi service in Austin, Texas. Rides cost $4.20, the fleet is composed of modified Model Ys, and -- for now -- human safety monitors sit behind the wheel.Still, the road ahead presents challenges. Tesla still requires regulatory approval, a flawless safety record, and customer trust before it can operate robotaxis at scale. Besides, competitors like Waymo and Cruise have already deployed limited fleets. For instance, Waymo has partnered with Uber to offer autonomous rides in a few cities.

While Tesla is late to the party, it does have an advantage over its peers: vertical integration from AI training to manufacturing, giving it complete control of its services. Additionally, millions of Tesla cars are already running on FSD, providing the necessary data to help train its autonomous driving software.

Optimus: A bet on general-purpose robotics

While robotaxis are an extension of Tesla's autonomy work, Optimus is an entirely different bet: a humanoid robot capable of performing general-purpose tasks. First revealed in 2021, the prototype has progressed from a static concept to a walking, functioning machine that can manipulate objects. Tesla's stated goal is for Optimus to handle repetitive, dangerous, or mundane tasks -- starting in Tesla's factories before being rolled out to other industries.

If successful, Optimus could open a market even larger than the mobility sector. Industrial automation, elder care, hospitality, and household assistance are just a few potential applications. Founder and CEO Elon Musk has even suggested the humanoid robot could eventually outnumber Tesla's cars, becoming the company's most valuable product line. He also predicted that Optimus could lift Tesla's market cap to $25 trillion.

While it's still early days, the economics for this business could be compelling. Tesla could sell Optimus units directly or lease them on a subscription model, generating recurring revenue streams. And because much of the core technology -- batteries, actuators, sensors, artificial intelligence (AI) -- overlaps with Tesla's existing products, the company can leverage its supply chain and engineering talent without starting from scratch.In other words, there are good reasons for investors to be optimistic about this moonshot project.

What it means for investors

Tesla's robotaxi and Optimus bets share a common thread: both hinge on AI-driven autonomy and Tesla's ability to execute at scale. Neither will contribute meaningful revenue in the next year or two, but each could be transformative over the next decade if the technology matures as planned.Investors should weigh the high risk against the equally high potential reward. Tesla's core EV business already gives it a strong foundation, but if even one of these moonshots pays off, the company's long-term growth curve could steepen dramatically.

For now, both are speculative -- but they're also the kind of asymmetric bets that have defined Tesla's history. If successful, these new businesses could propel Tesla to become the world's most valuable company.Investors should closely monitor Tesla as it executes its ambitions.

Source: The Motley Fool

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Gerik

Economic

Rising inflation and market reaction

The latest July inflation reports showed a surprising surge in the Producer Price Index to a three-year high, driven mainly by services such as airline fares and dental care. Similarly, the Consumer Price Index indicated that the earlier softening in services prices, which had offset goods inflation from tariffs, has reversed. Despite these developments, markets remained largely steady last week, continuing to price in an 85 percent probability of a September rate cut. This divergence between data and market expectations reflects a tension: while investors anticipate monetary easing, the Federal Reserve faces a risk that inflation momentum could prove more persistent than assumed.

The Federal Reserve’s two objectives maintaining price stability and supporting maximum employment are now increasingly in conflict. Downward revisions to July’s jobs report suggested a weakening labor market, strengthening arguments for rate cuts. Yet inflation surprises complicate this narrative. The causal link between rising wages, energy costs, and services inflation points to structural drivers that extend beyond tariffs. As Lauren Saidel-Baker of ITR Economics emphasized, inflation risks are immediate, while labor market weakness may evolve more gradually.

Economists’ diverging perspectives

Opinions among economists diverge sharply on the appropriate policy path. Some, such as Saidel-Baker, argue the Federal Reserve should maintain or even raise rates to avoid losing control of inflation. Chicago Fed president Austan Goolsbee highlighted the particular concern that services inflation, which is not tied to tariffs, could persist if the latest rebound is not temporary. In contrast, Morgan Stanley’s Michael Gapen acknowledged both positive and negative signals tariff-related inflation was less severe than anticipated, but services prices have firmed after a period of softness. He still expects no rate cuts in 2025, warning that strong labor market fundamentals, reinforced by immigration controls, could keep inflation elevated.

Although the labor market remains relatively resilient, there are early signs of strain. Payroll growth is slowing, job openings are declining, and continuing unemployment claims are rising. This evolving situation highlights a correlation: weakening employment trends could dampen consumer spending power, thereby softening inflationary pressures in the longer run. Chris Watling of Longview Economics takes this perspective further, arguing that the real risk lies in slowing growth. He contends that the Federal Reserve should begin cutting rates in September and continue easing through the end of the year, since deteriorating housing, manufacturing stagnation, and labor market fragility outweigh near-term inflation concerns.

The July inflation data has sharpened the policy dilemma facing the Federal Reserve. Services-driven inflation shows signs of persistence, suggesting a risk of prices drifting further from the Fed’s 2 percent target. At the same time, weakening employment indicators point to an economic slowdown that could justify immediate monetary easing. The coming weeks, particularly Jerome Powell’s Jackson Hole speech, will be pivotal in clarifying whether the Fed prioritizes fighting inflation or cushioning growth. Markets remain optimistic about rate cuts, but the outcome will depend on how policymakers weigh these conflicting signals.

Source: Yahoo Finance

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Michelle

Commodity

Political

Oil prices held steady on Monday as traders awaited clues from a meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy as they attempt to come to a peace deal to end Europe's deadliest war in 80 years.

Brent crude futures stood at $65.87 a barrel at 0847 GMT, while U.S. West Texas Intermediate crude was up 9 cents, or 0.14%, to $62.89 a barrel.

Trump met Russian President Vladimir Putin in Alaska on Saturday and emerged more aligned with Moscow on seeking a peace deal instead of a ceasefire first.

"Market focus now shifts to today's Washington meeting for signs of a deal that could eventually boost crude and gas supply. Meanwhile, in the week to August 12, speculators held the first-ever combined net short position in WTI (CME & ICE), leaving prices exposed to any upside surprises," said Saxo Bank's head of commodity strategy, Ole Hansen.

"I don’t believe the oil market has priced in a full peace dividend that potentially could see prices of crude and EU gas suffer further setbacks," Hansen added.

White House trade adviser Peter Navarro's comments around India's purchases of Russian crude funding Moscow's war in Ukraine led to crude ticking up earlier in the session.

"India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs," Navarro said.

"The U.S. adviser's sharp words on India's Russian crude imports, paired with postponed trade talks, revive concerns that energy flows remain hostage to trade and diplomatic frictions, even as peace prospects in Ukraine brighten," said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.

On Saturday, Trump said he did not immediately need to consider retaliatory tariffs on countries such as China for buying Russian oil but might have to "in two or three weeks", cooling initial concerns about a disruption in Russian supply.

China, the world's biggest oil importer, is the largest buyer of Russian oil, followed by India.

Investors are also watching for clues from Federal Reserve Chairman Jerome Powell's comments at this week's Jackson Hole meeting regarding the path of U.S. interest rate cuts that could boost stocks to further records.

Source: Reuters

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Gerik

Economic

Historic surge in outbound flows

China recorded its highest-ever monthly capital outflows in July, with domestic banks wiring a net $58.3 billion abroad on behalf of clients for securities investment. This marked the largest figure since the State Administration of Foreign Exchange began tracking such flows in 2010. The spike was closely linked to stronger participation in Hong Kong markets and the expansion of the Southbound Bond Connect program, which opened new opportunities for mainland investors to access offshore debt.

The July surge underscores a clear causal relationship between Beijing’s liberalization measures and investor behavior. Regulators’ decision to expand access for non-bank financial institutions, including securities firms and insurers, directly encouraged greater participation in overseas debt markets. Onshore investors purchased 12.6 billion yuan ($1.8 billion) of offshore bonds through the Southbound Bond Connect, the highest monthly total of the year. This reflected both regulatory incentives and rising domestic appetite for portfolio diversification.

At the same time, correlation rather than causation can be observed in foreign fund withdrawals. Offshore institutions reduced their holdings of Chinese interbank bonds by 300 billion yuan, their lowest level since early 2024. This decline aligned with global shifts in risk preference and easing US-China trade tensions, suggesting that reduced foreign demand was influenced more by comparative yield opportunities than by Chinese policy changes alone.

Shifting investor preferences

Foreign retrenchment from Chinese assets was also evident in negotiable certificates of deposit, once a favored instrument among overseas funds. Holdings fell 15% in July, or 167 billion yuan, marking the third consecutive month of accelerated declines. The weakening appeal of such instruments illustrates how shifting global liquidity conditions and expectations of US rate cuts are shaping portfolio allocations.

Meanwhile, China appears prepared to accommodate capital outflows in the near term, leveraging a weaker dollar environment to promote gradual liberalization. By raising quotas for approved outbound investment in June, regulators signaled intent to encourage diversification and support the yuan’s longer-term role in global finance.

Policy implications and outlook

The simultaneous push for capital account liberalization and observed bond outflows highlights a delicate balance for policymakers. While outward investment strengthens the yuan’s global footprint, persistent foreign selling risks undermining confidence in domestic debt markets. Economists, however, argue that the risks are contained due to expectations of narrowing yield differentials with the US as Federal Reserve policy loosens.

China’s record outflows in July capture both the success and the challenges of financial liberalization. Regulatory reforms have stimulated new channels of overseas investment, but foreign retrenchment underscores the fragility of international confidence in Chinese assets. The months ahead will test Beijing’s ability to reconcile its strategic aim of yuan internationalization with the immediate need to sustain stability in domestic capital markets.

Source: Bloomberg

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ING

Economic

Forex

Commodity

US tariffs are already denting European exports

In June, eurozone exports dropped by 2.4% month-on-month and on the year were up by 0.4%. As imports increased by more than 3% MoM, the seasonally-adjusted trade surplus narrowed to €2.8bn, from €15.6bn in May. There is no data on bilateral trade for the eurozone, only for the EU. And the June data shows the expected collapse of European exports to the US (-10% YoY) but also China (-12% YoY). Tariffs and, more structurally, the loss in international competitiveness are highly affecting European exports. Despite talks about finding new trading partners to make up for the potential loss of trade with the US, European exports to India and Brazil, for example, were down by some 5% YoY in June.

More generally speaking, the first months of the year saw highly volatile industrial data in Europe. The up and down was mainly driven by frontloading of US exports ahead of looming tariffs and subsequent reversals. Today’s June data provides a first impression of what could be left of European exports after the first tariff wave. Don’t forget that in June, many European exporters had already been subject to 10% tariffs, automotive producers to 25% and steel and aluminium producers as much as 50%. The 15% tariffs agreed in July became effective on 1 August.

The strengthening of the euro since the start of the year, US tariffs, as well as broader uncertainty regarding the future of global trade and fierce competition for European exporters in general, are likely to weigh on European exports moving forward. Currently, it's hard to see how exports could soon return as a powerful engine of European growth.

Source: ING

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Winkelmann

Forex

Economic

The USDCAD rate corrects amid positive economic data from Canada, currently standing at 1.3802.

USDCAD forecast: key trading points

● Investors focus on Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Symposium

● Inflation in Canada slowed, but the Bank of Canada’s preferred gauge remained at 3.0%

● USDCAD forecast for 18 August 2025: 1.3880

Fundamental analysis

The USDCAD rate is declining after rebounding from the 1.3820 resistance level. The US dollar remains under pressure as markets expect the Fed to cut interest rates by 25 basis points in September, with the probability of such a move currently priced at 84%. Investor attention shifts to Federal Reserve Chairman Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium, which may provide new clues about the future policy path.

Economic data from Canada supported the Canadian dollar. In June, manufacturing sales rose by 0.3%, driven by the oil, coal, and food sectors, while wholesale trade grew by 0.7%, reaching 84.7 billion CAD. These figures highlight the resilience of domestic activity and reduce the risks of a slowdown.Inflation in the country slowed but remains above target. The Bank of Canada’s preferred inflation gauge held steady at 3.0% in June, leaving little reason for accelerated rate cuts and tempering market expectations for more aggressive policy easing.

USDCAD technical analysis

The USDCAD pair is trading within an ascending channel, forming a Triangle pattern. The price is hovering above the EMA-65, reflecting buyers’ local advantage. Consolidation within a narrowing range signals a likely acceleration of movement once one of the boundaries breaks.Today’s USDCAD forecast suggests a breakout above the Triangle’s upper boundary with growth towards 1.3880. The Stochastic Oscillator supports this recovery scenario, with its signal lines exiting the oversold zone, indicating decreased selling pressure.

Consolidation above the 1.3825 level would further confirm the bullish outlook.

USDCAD Consolidates In A Triangle, Investors Await Powell’s Signals_1

Summary

The USDCAD rate remains under pressure, with solid Canadian economic data and persistent inflation supporting the local currency. USDCAD technical analysis points to a high probability of breaking above the Triangle’s upper boundary, with potential growth towards 1.3880.