- Bitcoin has plummeted nearly 9% from its all-time high of US$124,457 reached on 14 August, now trading at approximately US$112,733.
- Major cryptocurrencies including Ethereum, XRP and Solana have all suffered significant losses of 7-8% over the past week.
- Institutional investors are hedging their bets with massive ETF liquidations, including US$925.7 million flowing out of US Ethereum ETFs and US$975 million from Bitcoin ETFs since Friday.
- Market uncertainty persists around potential Fed rate cuts and Trump’s tariff policies, with the Crypto Fear & Greed Index sitting at a neutral 50 as traders await Jerome Powell’s Jackson Hole speech.
The crypto market looks wobbly once again. After well over a week of major downturns, yesterday appeared to signal a recovery rally. Alas, it was not to be, and the market has moved further south today.
After reaching an all-time high of US$124,457 (AU$193,764) on 14 August, Bitcoin (BTC) has dropped almost 9%. At the time of writing, it is trading at just US$112,733 (AU$175,591).
The second-largest cryptocurrency, Ethereum (ETH), has not fared much better, losing 8% over the past week and now trading at US$4,257 (AU$6,630) – still short of its 2021 all-time high of US$4,376 (AU$6,812).
Other major digital assets are also down, with XRP (XRP) losing 8% in the past week, while Solana (SOL) has lost 7% over the same period.
What Will Fed Chair Powell Leave Behind?
The market is waiting for some relief from the US Federal Reserve. On Friday, Fed Chair Jerome Powell will speak at the Fed’s annual symposium in Jackson Hole, Wyoming, for the last time in his term.
US interest rates have been held between 4.25% and 4.5% since December 2024. According to CME’s FedWatch, there is a 79.1% chance that the Fed will lower rates by at least 0.25% next month.
Not everyone is convinced that rate cuts are imminent. There is also concern that US President Donald Trump’s erratic tariff decisions could still drive inflation. With that in mind, the Crypto Fear & Greed Index remains at 50 – Neutral – indicating that traders are far from certain about the market’s direction.
Related: Aggressive Strategy: Tidal Trust II Seeks SEC Approval for Leveraged XRP and Solana ETFs
US and Australian ETFs See Massive Sell-Offs
Institutional investors, meanwhile, appear to be hedging their bets, with massive liquidations in crypto-related exchange-traded funds (ETFs). ETFs for both Ethereum and Bitcoin have been hit hard, in the United States as well as in Australia.
ASX-listed Bitcoin ETFs, managed by VanEck and BetaShares, have fallen almost 5% since last week.
In the US, things are no better: ETH ETFs have seen four consecutive days of net outflows, with US$925.7 million (AU$1.4 billion) withdrawn from US spot ETFs since Friday.
US spot Bitcoin ETFs experienced net outflows of US$975 million (AU$1.5 billion) over the same period.
This comes after Ether ETFs last week had far outperformed their BTC ETF counterparts in terms of net inflows, until outflows began on Friday.
Despite the recent outflows, US Bitcoin ETFs still account for 6.1% of all Bitcoin, holding 1.292 million BTC.
Related: Hype or Real Season Ahead? Tapping Into Crypto Podcast On Alt Coin Buzz Hits 5-Year High
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