5 min readBitcoin is trading around 113.5k, having recovered from yesterday’s low of 112.5k, although it remains down over 3% this week and is 8% down from its record high of 124.4k.
Meanwhile, Ethereum is faring slightly better, trading at 4285, up from yesterday’s low of 4069 but still down 3% across the week. Even so, the upside appears limited for now.
Caution reins after FOMC minutes & ahead of Powell
Traders are showing signs of caution after the minutes from the July FOMC minutes release late yesterday showed a slightly hawkish bias at the Fed. Fed Governors Michelle Bowman and Christopher Waller were the only policymakers to vote for a rate cut at the meeting, with other policymakers keen to wait for further clarity over the impact of trade tariffs on inflation.
Last week’s PPI data came in hotter than expected, suggesting that inflationary pressures are building. The data fueled a correction across risk assets, pulling BTC and cryptocurrencies lower.
Attention is now turning to US PMI data and Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday.
On-chain data points to slowing demand.
While the macro backdrop is uncertain, on-chain data is also showing weakening demand and profit-taking. According to CryptoQuant data, BTC Apparent Demand has dropped from its July high of 174k to just 59k on Wednesday. Demand from institutions also slowed, with 30-day ETF purchases slowed to 11k, the lowest level in 3 months. These figures point to slowing demand momentum, which, if it continues, could pull BTC lower.
ETH rises cautiously as whales show conviction
While ETH booked strong gains earlier in the month, reaching a 4-year high of 4800 on August 14, the price then headed lower, dropping to 4300 at the time of writing. Interestingly, whales have used this selloff as an opportunity to top up holdings.
Data showed that market participants holding between 10,000 and 100,000 coins purchased 400k ETH during the recent price drop, equivalent to $1.7 billion. This group now has 30 billion ETH tokens, which equate to around 25% of the current supply.
Substantial accumulation in the pullback indicates conviction among whales, which is considered a positive signal. Purchases from whales reduce E TH tokens available on the open market, which, when combined with steady or rising demand, should lift the price higher. Furthermore, the whales’ actions and conviction could encourage other market participants to follow suit.
ETH technical analysis
ETH continues to trade within an ascending channel dating back to early July. The price rebounded from the low of 4060, finding support on the lower band of the rising channel and recovering higher to test 4300 resistance, the round number. Should momentum continue, ETH could rise towards 4500, the mid-point of the rising channel, and then on towards 4800.
A break below the 4000 support zone creates a lower low and opens the door to 3500.
Trading involves risk.
Author
Risk DisclaimerThe content provided here is for informational purposes only. It is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results.
The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money.
The Company does not accept clients from the Restricted Jurisdictions as indicated in our website/ T&C. Some services or products may not be available in your jurisdiction.
The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.
