Bitcoin & Ether's Fall From ATHs: Correction or Caution?
The global crypto market is seeing a pullback after top tokens hit new all-time highs, with profit-taking pressure weighing significantly.
Dormant whales have also moved to unload some cryptos, which is hurting the market sentiment just after Fed boss Jerome Powell signaled a shift in the central bank's focus to slowing jobs over inflation.
Ether Breaches New ATH
While bets on a Fed rate cut did boost Ether to a new record high on Friday, and again on Sunday, the token has since lost momentum.
Ether hit an all-time high for the first time in nearly four years on Friday, driven by a resurgence in demand. This second-largest cryptocurrency has been recognized as a more versatile option compared to the dominant player in the market, Bitcoin.
The native token of the Ethereum blockchain increased by as much as 15%, reaching $4,866.73, surpassing the prior all-time high of $4,866.40 set in November 2021. It then extended its rally to a fresh all-time high of $4,954.81 on Sunday, but pared its gains soon after. Ethereum is currently positioned just above $4,700.
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Ether has surged over 40% this year, surpassing Bitcoin's performance, even as the original digital currency continues to reach new heights following its endorsement by President Donald Trump during last year's US presidential election.
Still, Bitcoin has languished well below its all-time high hit on August 14. Its price has fallen below $113K, experiencing a significant reversal after reaching new record peaks, as macroeconomic pressures increase despite optimism for Fed rate cuts.
Source: CoinGecko
During the weekend, holders realized $3.3 billion in profits, resulting in a significant correction from the peak value. The price of Bitcoin declined after a large holder sold 24,000 BTC, which amounted to more than $2.7 billion.
In the past 24 hours, the cryptocurrency market capitalization has decreased by approximately 1%, resulting in over half a billion dollars in liquidations that have unsettled those trading on leverage.
Recently, discussions on the social media platform X indicated that a significant entity liquidated more than 24,000 BTC in recent days, leading to a sudden decline in Bitcoin price.
As per the screenshots provided by WhaleWire CEO Jacob King, the wallet address "19D5J…WoZ1C" transferred several large amounts of bitcoin, varying from 3,000 BTC to 6,000 BTC, to various addresses between August 16 and 24.
More Positioning Into Ether Away From Bitcoin?
Recently, there has been a notable trend of significant investors reallocating their assets from Bitcoin to Ethereum.
On Friday, a report from blockchain analytics firm Lookonchain revealed that a significant wallet recently converted a portion of its 100,784 BTC to acquire 62,914 ETH and set up a long position in ETH derivatives totaling 135,265 ETH.
Recent observations indicate that institutional investors are favoring spot exchange-traded funds, particularly with ether ETFs experiencing more substantial inflows, while BTC ETFs have encountered comparatively smaller inflows or even outflows in August.
According to TradingView, the current Bitcoin dominance stands at 58.14%, a decline from approximately 61% at the start of this month, indicating a shift in investor attention towards altcoins.
Ethereum is presently trading at approximately $4,712, following its recent new all-time high on Sunday, surpassing $4,950.
Source: TradingView
The overall cryptocurrency market experienced a decline, bringing the total market capitalization below $4 trillion.
While Powell's dovish tone has pushed up the chances of a Fed rate cut in September to 84% in futures markets, data between now and the next meeting is weighing on traders' sentiment.
In the near term, the market is expected to experience increased fluctuations as participants closely monitor essential macroeconomic indicators, particularly the initial jobless claims report scheduled for Thursday.
The risks associated with cryptocurrencies are evident. Extended elevated interest rates would constrain liquidity, raise financing expenses for miners, and reduce trading activity on exchanges.
Bitcoin is finding support near the 100-day moving average, which is around $111,000, according to the current market analysis. The next support level is around $105,000 if this one is broken.
BitQuant has reiterated its goal of $145,000 by 2025 and predicted that Bitcoin's price will stay over $100,000 throughout the present bull market.
While some of the top 100 cryptocurrencies are seeing gains, the vast majority are still seeing losses.
Elsewhere
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Yat Siu on the Future of Crypto: AI, Blockchain, and Creativity
In this episode, the chairman and co-founder of Animoca Brands discusses the implications of AI on jobs, the importance of nurturing creativity in education, and the launch of Moca Network, a new blockchain initiative aimed at enhancing digital identity and reputation. Yat emphasized the need for a shift in how we view data ownership and privacy, as well as the role of speculation in the crypto space.
Access the episode from your preferred podcast platform here.
Blockcast is hosted by Head of APAC at Ledger, Takatoshi Shibayama. Previous episodes of Blockcast can be found here, with guests like Kapil Duman (Quranium), Eric van Miltenburg (Ripple), Jeremy Tan (Singapore parliament candidate), Hassan Ahmed (Coinbase), Sota Watanabe (Startale), Nic Young (Oh), Jacob Phillips (Lombard), Chris Yu (SignalPlus), Kathy Zhu (Mezo), Samar Sen (Talos), Jason Choi (Tangent), , Mark Rydon (Aethir), Luca Prosperi (M^0), Charles Hoskinson (Cardano), and Yat Siu (Animoca Brands) on our recent shows.
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