Bitcoin’s Fragility and Ethereum’s Rotation Signal Market Turmoil in Asia
Bitcoin finds itself on shaky ground this Tuesday, trading just shy of $110,000 after an unsuccessful attempt to rally. The cryptocurrency is down approximately 7% since its peak above $117,000 following Federal Reserve Chair Jerome Powell’s dovish remarks at Jackson Hole, according to CoinDesk data. Meanwhile, Ethereum, which briefly soared to a high of $4,900, now hovers above $4,300 but looks fatigued after weeks of leading the charge.
A Market Under Pressure
The crypto bull run seems to be losing steam. Liquidity is thinning, ETF outflows are swelling, and on-chain activity is showing signs of fragility. Analysts point to whales shifting their focus to Ethereum and retail investors facing liquidations as contributing factors. Yet beneath the surface, billion-dollar investments from sovereign and institutional entities are quietly embracing volatility, leading to a divergence between weak short-term sentiment and strategic long-term acquisitions. As explored in our recent coverage of Bitcoin ETFs shedding $1 billion, these outflows underscore the shifting dynamics in the crypto market.
Glassnode’s latest Market Pulse reflects this shift, indicating a transition from euphoria to fragility. Spot momentum is waning towards oversold levels, ETF flows have swung to a $1 billion outflow, and realized profits are collapsing to breakeven. QCP Capital highlighted a recent market crash, triggered by an early holder unloading 24,000 BTC into a thinly liquid market, resulting in $500 million in liquidations. This event laid bare the market’s vulnerability, with ETFs experiencing $1.2 billion in outflows even as whales gravitate towards Ethereum, pushing the ETH/BTC cross through 0.04.
Institutional Moves and Retail Woes
Singapore-based market maker Enflux argues that not all market flows are created equal. While retail investors faced liquidations, a staggering $2.55 billion ETH stake routed through a single contract, alongside the UAE royal family’s $700 million BTC exposure via Citadel Mining, resemble more strategic allocations than speculative moves. Despite weakening address activity and declining fee volumes, there are players leveraging volatility to establish substantial positions. This follows a pattern highlighted in our analysis of a Bitcoin whale dumping $75 million to go long on Ethereum, indicating a strategic shift among major players.
The outcome is a clear divergence: retail leverage is being flushed out, while long-horizon investors continue to accumulate. However, with transaction fees plummeting to decade lows and blocks clearing with minimal congestion, Bitcoin’s liquidity looks precarious. This poses a challenge for miners already feeling the squeeze from halved rewards and sets the stage for potential market consolidation or even deeper drawdowns as September looms—a month historically unkind to Bitcoin.
Market Reactions and Broader Impacts
Bitcoin’s brief rebound from its weekend plunge faltered on Monday, with prices dipping to a seven-week low near $109,700, down 2.7% on the day. Ethereum and other altcoins also took a hit, with ETH dropping nearly 8% below $4,400 and SOL, DOGE, ADA, and LINK sliding 6–8%, triggering $700 million in liquidations, predominantly from long positions.
Elsewhere, gold remains steadfast above $3,350 as Powell’s dovish remarks fuel rate-cut expectations and geopolitical tensions maintain safe-haven demand. However, the dollar’s strength and forthcoming U.S. growth data present potential obstacles.
In the Asia-Pacific region, stocks stumbled on Tuesday, with Japan’s Nikkei 225 and Topix declining 0.54% amid concerns over Trump’s comments on China and U.S.–South Korea trade discussions. Across the Pacific, U.S. stocks retreated Monday from a rally driven by rate-cut bets, with the S&P 500 down 0.4% as attention shifts to Nvidia’s upcoming earnings.
In the ever-evolving crypto landscape, Grayscale has filed to convert its Avalanche Trust to an ETF, and Japan’s Finance Minister recently remarked that crypto assets could play a role in a diversified portfolio. Venture trends, regulatory victories, and consumer innovation continue to shape what some are calling crypto’s new era.
Looking Ahead
As the market grapples with these challenges, questions linger about whether the current trends can persist. With September historically a tough month for Bitcoin, and liquidity concerns rising, the market appears to be bracing for consolidation. Yet, with sovereign and institutional players quietly accumulating, the long-term outlook remains anything but predictable. Will this dichotomy between short-term fragility and long-term accumulation continue to define the crypto landscape? Only time will tell.
Source
This article is based on: Asia Morning Briefing: BTC Fragility and ETH Rotation Signal Market Bracing for Consolidation Without New Liquidity
Further Reading
Deepen your understanding with these related articles:
- Old Bitcoin Whale Diverts Capital to Ethereum Amid Rising Interest
- Public Keys: Ethereum Treasuries Soar, Bitcoin ETFs’ $1 Billion Bleed, Crypto IPO Chatter
- Asia Morning Briefing: Bitcoin’s ETFs Kill the Transaction Fees, Punishing the Miners More
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
