Crypto markets suffered a significant blow this week, with nearly $900 million in liquidations triggered by a sharp correction in Bitcoin and Ether.

Overleveraged long positions were primarily affected, with Ether traders experiencing $320 million in forced unwinds and Bitcoin traders facing $277 million in losses. Additional losses were seen in Solana, XRP, and Dogecoin. The correction, exacerbated by an overnight dip in the S&P 500, sent volatility soaring. Daily Bitcoin volatility jumped from 15% to 38%, while Ether's surged from 41% to 70%, indicating Ether's greater fragility due to higher leverage. Options markets reflected a defensive posture, with a significant preference for put options.

Traders are now focused on key price levels, anticipating further volatility, particularly for Ether, where positioning remains stretched. Upcoming economic data releases add to the uncertainty.