Summary
- Bitcoin ETFs are facing a major sell-off, seeing over $1.1 billion in outflows in the last five days as investors adjust their risks before the Jackson Hole symposium.
- In contrast, Ethereum ETF flows have shown resilience, with a notable inflow on August 21.
- The cryptocurrency market remains extremely volatile, with significant liquidations occurring as traders anticipate the Fed’s interest rate decision.
Bitcoin ETFs have continued their pattern of outflows, losing over $1.1 billion this week as investors reassess their positions ahead of U.S. Federal Reserve Chairman Jerome Powell’s upcoming speech at the Jackson Hole symposium.
This significant sell-off of risk assets coincides with a 10% drop in Bitcoin’s price since hitting an all-time high of $124,545 on August 14.
Similarly, U.S. equities have faced declines, with the S&P 500 index down 1.72% since its recent peak on August 13.
The widespread de-risking across ETFs and the cryptocurrency market stems from alarming inflation data published in August, leading to shifts in the market’s expectations for interest rate cuts.
As a result, the odds of a rate cut have diminished from 90% to 75%, prompting a wave of outflows from Bitcoin ETFs.
Ethereum ETF flows, on the other hand, have defied the negative trend, recording a $286.7 million inflow on August 21, halting four days of outflows.
“Ethereum is experiencing one of the most unusual weeks right now,” stated Arthur Azizov, Founder and Investor at B2 Ventures, to Decrypt.
The market is “caught between adoption and stress,” according to Azizov, emphasizing that buyers are struggling to affect prices even with positive news like BTCS’s plan to distribute dividends in Ethereum.
Azizov noted that the recent $3.8 billion in staking validator exits has added to the selling pressure on Ethereum, but emphasized that the long-term trend among institutional investors is a “significant advantage,” as these large players hold 5% of Ethereum’s supply, which constrains liquidity.
As investors await Powell’s insights, it is likely that volatility will remain high.
The sharp decline in Bitcoin’s price, hovering around $112,500, has triggered over $100 million in liquidations within just the last hour, with $317 million in total positions liquidated in the past 24 hours, according to CoinGlass data.
Options data from Deribit indicates a strong concentration of trading activity around the $120,000 and $110,000 strike prices, suggesting a fierce contest at these levels in anticipation of Powell’s imminent speech.
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