- A large, inactive Bitcoin holder sold off 24,000 BTC and shifted funds into Ethereum.
- Investors are re-evaluating the likelihood of Federal Reserve interest rate cuts following analysis of Chairman Powell’s recent remarks.
Cryptocurrency markets experienced a downturn late Sunday, ending a quiet weekend with a significant sell-off.
The market decline occurred alongside reports that a long-dormant Bitcoin “whale,” believed to be linked to a substantial withdrawal from the HTX exchange in 2019, had divested a considerable amount of Bitcoin. According to blockchain data initially identified by Timechain Index founder Sani, this entity made a large sale.
This entity, which hadn’t moved any digital currency in half a decade, reportedly sold Bitcoin worth approximately $2.7 billion over the past few days.
Subsequently, they started acquiring significant amounts of Ether, accumulating over 400,000 ETH, which were then used for leveraged long positions and staking activities.
However, the large sale was not the sole factor influencing market pressure.
Dovish Powell
Federal Reserve Chairman Jerome Powell’s recent speech at Jackson Hole, which carried a slightly dovish tone, initially boosted the crypto market. Ether saw an increase of nearly 10%, and XRP rose by over 5% within a matter of hours.
As the weekend progressed, however, market participants began to question whether an interest rate reduction in September was indeed a certainty.
“The speech included just enough suggestions of a more relaxed policy to cause an immediate positive reaction,” commented Peter Chung and Rick Maeda of Presto Research. “A more careful examination reveals that the Fed remained uncommitted to an immediate rate cut.”
The CME FedWatch tool continues to indicate a high probability of around 87%. Bettors on the crypto prediction market Polymarket are estimating an approximate 81% chance of rate reductions, a significant increase from the 57% figure before Powell’s address.
By Monday morning, the total value of the cryptocurrency market had decreased by over $80 billion, falling below the $4 trillion level. Furthermore, over $715 million in leveraged positions were liquidated.
Crypto Market Performance
- Bitcoin has decreased by 3% in the last 24 hours and is currently trading at $111,480.
- Ethereum has declined by 3.6% during the same timeframe, reaching $4,590.
Further Reading
Kyle Baird is DL News’ Weekend Editor. Have a story tip? Contact him at kbaird@dlnews.com.