In brief
- Bitcoin ETFs are experiencing a significant sell-off, with over $1.1 billion in outflows over the past five days as investors de-risk ahead of the Jackson Hole symposium.
- Ethereum ETF flows have bucked the bearish trend, with a strong inflow on August 21.
- Crypto market remains highly volatile with significant liquidations and key price levels in play, as traders await clarity on the Fed’s interest decision.
Bitcoin ETFs continued their five-day streak of outflows, shedding over $1.1 billion in the past week as investors de-risk ahead of U.S. Federal Reserve Chairman Jerome Powell’s final address at Friday’s Jackson Hole symposium.
This widespread sell-off in risk-on assets has coincided with a 10% crash in Bitcoin’s price since its August 14 all-time high of $124,545.
U.S. equities have also suffered a similar fate, with the S&P 500 index down 1.72% since its own high on August 13.
The large-scale de-risking across ETFs and cryptocurrency markets can be attributed to a concerning inflation data released in August, leading to a significant shift in the market’s rate cut perspective.
The rate cut odds, as a result, have dropped from 90% to 75%, triggering an outflow spree in Bitcoin ETFs.
Ethereum ETF flows, however, have bucked the bearish trend, noting a $286.7 million inflow on August 21, ending the four-day outflow streak.
“Ethereum is going through one of the strangest weeks these days,” Arthur Azizov, Founder and Investor at B2 Ventures, told Decrypt.
The market is “stuck between adoption and stress,” Aziziv said, highlighting the buyers’ inability to move prices despite positive news like BTCS’s plan to pay dividends in Ethereum.
The recent $3.8 billion in staking validator exits have added selling pressure to Ethereum, said Azizov, but clarified that the long-term institutional trend is a “key tailwind” since these large investors control 5% of Ethereum’s supply, which helps “tightens the float.”
As investors speculate on what Powell might say, volatility is likely to remain elevated.
The sudden drop in Bitcoin’s price, which trades around $112,500, caused over $100 million in liquidations over the past hour alone, with $317 million worth of positions forced to close in the past 24 hours, according to CoinGlass data.
Options data on Deribit shows a high concentration of trading around the $120,000 and $110,000 strike prices, indicating a strong battle for control at those levels ahead of Powell’s highly anticipated speech.
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