Bitcoin undergoes consolidation as capital flows transition towards Ethereum and the broader altcoin sector…
Bitcoin (BTC) remains stable at current levels as investments extend along the risk spectrum to Ethereum and additional altcoins, as stated in news reports lately.
This transition signifies a calculated rotation of institutional liquidity that follows Bitcoin’s peak historical valuation.
Bitcoin experienced a decline of 4.5% from the weekly opening on August 18 to August 22, retreating to local range lows as investors mitigated risk in anticipation of the Federal Reserve’s symposium in Jackson Hole.
The asset peaked at $111,990 amid renewed weaknesses in the flows of U. S. spot exchange-traded funds (ETFs), with Bitcoin ETFs reflecting $1.18 billion in net outflows during the week. BTC also fell below the $110,000 mark, trading at $109,795.71.
Federal Reserve Chairman Jerome Powell’s positive comments at Jackson Hole incited a significant rebound in risk assets, triggering a widespread short squeeze across the cryptocurrency market.
Ether Spearheads Recovery
Ethereum spearheaded the recovery, soaring to a new all-time high of $4,958.70 on August 24, further establishing its position as a liquidity catalyst for institutional markets.
Spot ETH ETFs reported $197 million in outflows on August 18 alone, marking the third-largest daily withdrawal in history. Nevertheless, Ethereum treasury firms absorbed considerable selling pressure, with substantial institutional backing.
Corporate treasuries, intensified accumulation efforts, with on-chain treasury balances surpassing $10 billion. This report highlighted that this rotation illustrates diminished capital inflows into Bitcoin following its historical high of $123,640 earlier this month.
Bitcoin’s realized market capitalization increased at 6% per month during this current trend, contrasting with 13% monthly growth observed during late-2024 surges beyond $100,000, indicating a more cautious investor sentiment.
Macro indicators continue to exhibit support
As can be seen, global liquidity conditions remain favorable, with the collective M2 money supply from major central banks nearing $100 trillion. The structural upward trajectory in global liquidity strengthens the long-term optimistic outlook for digital assets, despite capital allocation becoming increasingly selective.
Solana is seen as going above $200, reaching $212.60 as the overall digital asset class advanced in conjunction with equity markets, reflecting tightening correlations between cryptocurrencies and traditional risk assets.
Meanwhile, network development progresses, exemplified by DBS Bank’s recent issuance of a tokenized note on the Ethereum platform.
