Jakub Porzycki | NurPhoto | Getty Images
Ether tumbled to start the week, erasing gains from its Jackson Hole rally after hitting a fresh record over the weekend.
On Monday, the price of the second largest cryptocurrency fell 8% to $4,431.60, according to Coin Metrics. On Sunday, it rose to an all-time high of $4,954.81, after hitting an earlier record Friday for the first time since 2021.
Meanwhile, bitcoin fell 2% to $110,531.00, its lowest level since July. The flagship cryptocurrency hit its most recent record of $124,496 on Aug. 13.
On Friday, crypto assets took off with the broader market after Federal Reserve Chair Jerome Powell hinted at upcoming rate cuts and investors returned to risk-on mode. That triggered forced selling of more than $245 million of long positions in ETH and about $175 million in long bitcoin positions in a 24 hour period, according to CoinGlass.
Ether (ETH) and bitcoin (BTC)
Ether, rather than bitcoin, has been leading the crypto marker for several weeks thanks to regulatory tailwinds, a boom in interest in tokenization (including stablecoins) and buying en masse by a new cohort of corporate ether accumulators like Bitmine and SharpLink.
That shift in leadership has helped support ETH, which has sustained the $4,000 level this month after unsuccessfully testing the resistance mark a handful of times since 2021.
“The buyers are finally bigger than the sellers,” said Ben Kurland, CEO at crypto research platform DYOR. “ETH ETFs are drawing steady inflows, and public companies are beginning to treat ETH as a treasury asset they can stake for yield — a stickier form of demand than retail speculation.”
“Additionally, nearly a third of supply is locked in staking, scaling solutions are mature and, with rate cuts back on the table, the cost of capital is falling,” he added. “Those forces turned $4,000 from a resistance level into a foundation for re-pricing ETH’s next chapter.”
Ether ETFs posted $341 million in inflows Friday and its second day in a row of positive flows, according to SoSoValue, led by Fidelity’s FETH fund. Meanwhile, bitcoin ETFs saw their sixth consecutive day of net outflows — primarily from BlackRock’s popular IBIT fund, while others saw minor inflows.
For the week ending Aug. 22, the ether posted $237 million in net ouflows, which was its first week of negative flows since May 9. Bitcoin ETFs saw more than $1 billion in net outflows in the same week.