Bitcoin Plunges Below $112K — Why ETH & DOGE Are Also Freefalling
Meta description: Bitcoin slid under $112K as leverage unwinds, ETFs see outflows, and risk-off hits crypto. Here’s why ETH and DOGE plunged too—and what to watch next.
Bitcoin’s drop below the $112,000 threshold jolted the entire crypto market, dragging Ethereum and Dogecoin lower in a swift, correlated sell-off. If you’re wondering what triggered the slide and how to position next, this expert breakdown from CyReader explains the key drivers, the on-chain and macro signals to monitor, and practical steps you can take right now.
Bitcoin Price Crash: BTC Slips Under $112,000
Bitcoin cracking below the $112,000 level is more than a round-number headline—it reflects a loss of a psychological anchor and a cluster of recent support zones. Once that floor gave way, liquidity thinned out and price knifed through bids, creating an “air pocket” that amplified the move. Historically, when BTC breaks key handles during periods of elevated leverage, the first leg down often comes fast, with follow-through dictated by how quickly bids rebuild and how derivatives positioning resets.
Under the hood, several forces typically converge during a move like this. Risk-off macro flows—such as a stronger U.S. dollar, rising Treasury yields, or equity weakness—tend to pressure crypto broadly. On the crypto-native side, ETF net outflows can remove a steady bid, while in derivatives, crowded longs, elevated open interest, and positive funding rates set the stage for cascading liquidations once price momentum flips. Add in exchange inflows from long-term holders, miners managing treasury, and automated DeFi liquidations, and you get a reflexive drawdown that feeds on itself.
For investors and traders, the focus shifts to confirmation rather than prediction. Watch whether spot buyers absorb supply at fresh ranges, whether funding turns sustainably negative (pointing to a short-heavy market), and if realized volatility starts to compress after the shock. On-chain, metrics like net exchange inflows, SOPR slipping below 1, and cooling MVRV can help gauge capitulation versus continuation. No strategy is one-size-fits-all, but tightening risk, using staged entries, and securing assets with a hardware wallet from our Ledger Nano X review can reduce unforced errors during turbulence.
Why ETH and DOGE Are Freefalling With Bitcoin
When Bitcoin falls hard, most altcoins don’t just follow—they outperform to the downside. ETH and DOGE exhibit higher beta to BTC in stress events because liquidity is thinner, order books are less resilient, and positions are often cross-collateralized with BTC. As BTC slides, margin calls propagate across the stack, forcing systematic de-risking that pushes altcoins lower faster than the market leader.
Ethereum faces its own gravity wells during a BTC-led flush. Spot ETH ETF flows, while supportive on quiet days, can flip neutral or negative when broader risk sentiment sours. Add the leverage built around staking, restaking, and DeFi collateral loops, and ETH becomes a nexus for liquidations when volatility spikes. If gas prices rise amid panic and L2 liquidity fragments, execution risk increases, further widening slippage and accelerating moves.
Dogecoin’s drop tends to be even more dramatic because memecoins are primarily sentiment- and liquidity-driven. Open interest in perpetual futures can balloon quickly during risk-on phases, but those same leveraged longs unwind violently when momentum turns. Without a durable fundamental backstop or consistent institutional bid, DOGE’s order book becomes skittish in drawdowns, so headline-driven whipsaws and whale flows matter disproportionately to short-term price.
FAQs
Q: Why did Bitcoin drop below $112K?
A: A combination of macro risk-off sentiment, ETF outflows, and derivatives liquidations typically drives such breaks. Once key levels fail, thin liquidity accelerates the move.
Q: Why do ETH and DOGE fall more than BTC during crashes?
A: ETH and DOGE have higher beta and thinner liquidity. Cross-collateralized leverage, DeFi liquidations, and sentiment-led flows amplify their downside relative to BTC.
Q: Is this the bottom for BTC, ETH, and DOGE?
A: Bottoms are only clear in hindsight. Watch funding rates, ETF flows, exchange inflows, and whether volatility compresses after the shock before assuming trend reversal.
Q: What should I do during a crypto crash?
A: Avoid impulsive trades. Reassess risk, use staggered entries, and consider moving long-term holdings to cold storage. Review our best hardware wallets guide for security.
Q: Are ETFs hurting or helping crypto prices?
A: Both can be true. ETFs deepen liquidity and broaden access, but when flows turn negative, they can accelerate downside by removing a steady spot bid.
Q: How do I track liquidation risk?
A: Monitor open interest, funding rates, and liquidation heatmaps on reputable analytics platforms. Our crypto volatility guide explains these indicators step-by-step.
Related reading on CyReader
- Best crypto exchanges for beginners: fees, safety, and pro tips (/guides/best-crypto-exchanges)
- Ledger Nano X review: secure your coins in minutes (/reviews/ledger-nano-x)
- How to use a hardware wallet: complete setup tutorial (/guides/hardware-wallet-setup)
- ETH staking explained: risks, rewards, and restaking basics (/guides/eth-staking)
- Crypto ETF flow tracker: how to interpret inflows and outflows (/guides/etf-flows-crypto)
- Managing volatility: DCA, hedging, and position sizing for crypto (/guides/crypto-volatility-strategies)
Crypto sell-offs feel chaotic, but the mechanics are consistent: risk-off macro, leverage unwinds, ETF flow shifts, and liquidity gaps that feed reflexive moves. If you’re positioning for the next leg, focus on data over headlines, secure what you own, and refine your plan before volatility returns. Want more? Explore our best hardware wallets guide, compare beginner-friendly exchanges, or read our latest crypto news for real-time market coverage. Nothing here is financial advice—stay informed, stay secure, and let your strategy lead your next decision.
