- The price of BTC has slumped to its lowest levels since early July driven by profit taking and economic and political uncertainty weakening investor appetite for risk.
- Fading expectations of a September rate cut plus Trump’s moves to fire Fed Governor Lisa Cook have contributed to weakened market sentiment, while a huge sale of 23,000 BTC drove a wave of liquidations across crypto derivatives markets.
- Meanwhile, inflows into ETH ETFs surged to US$443.9 million on Monday, twice that seen by BTC ETFs suggesting continued strong institutional interest in ETH.
Bitcoin slumped to its lowest price in six weeks on Monday, falling as low as US$109,214 (AU$168k) according to CoinGecko data, fuelled by profit-taking and a rise in macroeconomic uncertainty. The rest of the crypto market followed Bitcoin’s lead with some alts seeing double-digit daily drops over the past few days.
“The correction was driven by a mix of profit-taking, technical resistance, and shifting rate expectations,” Rachael Lucas, a crypto analyst at BTC Markets, explained in an interview with The Block. “Bitcoin briefly touched $117,000 on Friday before reversing, with the formation of a lower high signaling fading momentum.”
Over $150 million in long positions were wiped out, making it one of the largest Bitcoin long liquidation events since December 2024, according to a post from analytics firm Glassnode.
Bitcoin rallied briefly last Friday following a speech in which US Fed Chairman Jerome Powell suggested an interest rate cut could be forthcoming in September. But investors later reassessed their hopes of a looming rate cut, contributing to weaker market sentiment.
A huge sale of 23,000 BTC, valued at around US$2.6 billion (AU$4bn), also contributed to Bitcoin’s downturn, triggering a wave of liquidations across crypto derivative markets, Lucas said.
Adding to the macro uncertainty is US President Donald Trump’s move on Monday to fire Federal Reserve Governor Lisa Cook. Trump claims to have fired Cook for what he says are credible allegations of mortgage fraud, but Cook is refusing to step down and denies any wrongdoing.
It’s expected that Trump’s attempt to remove Cook and replace her with his preferred candidate will spark a long and complex legal battle likely to end in the US Supreme Court.
Related: Willy Woo: Bitcoin OG Whales Slowing Price Growth With Heavy Selling
Ethereum ETFs See Strong Inflows Despite Weakening BTC
Meanwhile, as BTC sees some price weakness, inflows into ETH spot ETFs have surged, with US$443.9 million (AU$684m) pouring into the funds on Monday, according to data from CoinGlass — more than double the inflows the BTC funds saw.
This increased interest in ETH ETFs relative to BTC suggests continued strong institutional interest in Ethereum, Lucas said in a post on X / Twitter.
Despite the sell-off, institutions are still buying. @ethereum ETFs pulled in US$443.9M in net inflows, outpacing Bitcoin ETFs at US$219M.
Rachael Lucas, BTC Markets analystEthereum also posted a new all-time high on Monday, briefly topping US$4,900 (AU$7.5k) before pulling back and consolidating around US$4,500 (AU$6.9k).
Posting on X in the days before ETH posted its new all-time high, crypto analyst Ben Cowan predicted a huge rotation back into Bitcoin in October following a BTC correction throughout September.
After Ethereum puts in new all time highs, we will likely witness a massive rotation back into Bitcoin. However, the rotation back to BTC will likely be initiated by a BTC correction in September, and will continue on a BTC rally in October.
Ben CowanRelated: Institutional ETH Treasuries Top $17.6B as 69 Entities Amass 4.1M Ether
On the Tapping Into Crypto podcast last week, Swyftx analyst Pav Hundal also predicted a potential BTC correction in September followed by a strong end to the year for both BTC and altcoins, following new ETH all-time highs.
I think a lot of it to kick off needs catalysts and if I had to point to one personally, I think it’s ETH making new all-time highs. I think once we get that maybe a lot of people just go ‘Alright, I’m gonna get into something’.
Pav Hundal, Swyftx analystCredit: Source link
