Bitcoin Possible Free Fall as Ether Rockets 14%

Bitcoin Possible Free Fall as Ether Rockets 14% — Markets Split After Jackson Hole Shock

Cryptocurrency markets split dramatically on Aug. 22, 2025, as bitcoin tumbled from recent peaks while ether — the token that powers the Ethereum network — surged roughly 14% on the day, underscoring a widening divergence between the two largest chains in a fragile risk-on rally. 

Bitcoin, which had hit record highs earlier this month, slid through key technical supports this week and traded in the low-\$110,000s on Friday after a string of profit-taking and margin liquidations rattled the market. Charts and exchange data show the token briefly falling below \$113,000 before a partial rebound later in the session. Traders and analysts pointed to forced selling of leveraged longs as contributing to the sharp move. 

Ether took the opposite tack. By the European afternoon session, ether was trading in the mid-\$4,800s — about 14% higher on the day — as traders rotated into assets they view as having stronger near-term fundamentals and clearer institutional demand. Crypto price feeds and market monitors recorded outsized buying in ether and several staking-related tokens, which together sparked a cascade of short-position liquidations on major derivatives venues.

Market participants largely attributed the abrupt divergence to a combination of macro and market-structure forces. Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole symposium, which were interpreted as tilting toward a lower-for-longer policy path, revived risk appetite across equities and crypto — but the reaction was uneven. Bitcoin’s sharp run-up in recent weeks left it vulnerable to rapid profit-taking, while ether benefited from fresh flows tied to staking demand and rising institutional interest in Ethereum-focused products. 

A second driver of ether’s outperformance is structural: a growing slate of institutional and analyst upgrades that have framed ether as not just a speculative asset but as a yield-bearing infrastructure token. Brokers and banks have recently lifted ether price targets and raised forecasts on the back of stronger on-chain activity, expanding staking markets and the prospect of more regulated financial products tied to ETH. Those narratives, coupled with heavy short interest in ETH derivatives, helped amplify upward moves as buyers stepped in.

The mechanics were visible in the derivatives market. CoinDesk and other trackers reported hundreds of millions of dollars of liquidations late Thursday into Friday, with a large share coming from short ether positions that were squeezed as prices spiked — a dynamic that fed back into spot market momentum. That forced deleveraging likely exaggerated intraday moves in both directions.

What the data say

Bitcoin traded in the low-\$110,000s on Aug. 22 after slipping below \$113,000 earlier in the day.

Ether was up about 14%, trading in the mid-\$4,800s, according to live market feeds.

Crypto derivatives platforms recorded large liquidations on both bitcoin and ether positions, with ether short squeezes accounting for a substantial portion of the forced exits.

Analysts and banks have raised medium-term ether forecasts in recent weeks, citing institutional demand, staking flows and on-chain usage as catalysts. 

Why ether outpaced bitcoin, and what it means

The episode highlights an important market evolution: bitcoin’s narrative remains dominance as a store of value and macro hedge, while ether’s value proposition increasingly ties to utility, income generation (staking) and institutional product adoption. When macro signals tilt toward easier policy or when institutional risk appetite returns, flows can prefer yield-bearing or productized exposures — a structural tailwind for ether that bitcoin does not enjoy in the same way.

That said, the current price action is not purely about fundamentals. Leverage, positioning and short-term momentum play an outsized role in crypto markets. Ether’s 14% jump was magnified by crowded short positions and derivatives mechanics; conversely, bitcoin’s sharper pullback reflected concentrated long positions that were vulnerable to liquidation once profit-taking accelerated.

For investors, the divergence raises three practical points. First, volatility is still the norm: large, rapid moves in either direction are common and can be amplified by leverage. Second, the growing institutional interest in ether — if durable — could justify a higher risk allocation to ETH for investors who accept blockchain-specific risks (protocol, regulatory, custody). Third, timing matters: chasing an asset after a violent move invites adverse entries; discerning allocators should consider position sizing, liquidity, and whether the recent momentum reflects a change in structural demand or a transient squeeze.

Bottom line

As of Aug. 22, 2025, bitcoin’s retreat and ether’s roughly 14% rally reflect a market in flux: macro cues and policy signals reopened appetite for risk, but market structure and product demand drove a pronounced split in performance. Ether’s current advance is supported by a credible narrative of institutional adoption and staking demand, yet the speed of the move — and the underlying leverage dynamics — counsel caution for anyone thinking the episode marks a permanent regime shift.

This article reports market prices and commentary accurate on Aug. 22, 2025. It is not financial advice.