Bitcoin whales are shifting billions of dollars into Ethereum, highlighting a weakening confidence among major players in Bitcoin's $108,000 support level.
Bitcoin derivatives indicate an increased risk of liquidation, with $390 million in leveraged long positions at risk if it falls below $107,000.
Since plummeting from $112,500 on Friday, Bitcoin (BTC) has been trading within a narrow range of 2.3%. The lack of momentum is partly attributed to the regulatory market closure during the U.S. Labor Day holiday, but the Bitcoin derivatives market shows a growing lack of confidence in the $108,000 support level.
The annualized premium for Bitcoin monthly futures is currently at 7%, firmly within the neutral range of 5% to 10%, unchanged from the previous week. The last time this indicator showed bullish signs was on August 24, when remarks from Federal Reserve Chairman Powell raised hopes for looser monetary policy, pushing Bitcoin up to $117,000.
Gold prices have risen 2.1% since Friday, exacerbating the pessimism among Bitcoin traders, as the cryptocurrency has fallen 12.5% from its historical high on August 14. Investors are questioning whether the recent decline reflects a broader risk-averse sentiment or Bitcoin-specific factors, especially after some long-term holders decided to liquidate part of their positions.
A Bitcoin whale, who had held for over five years, began shifting funds into Ethereum (ETH) starting August 21, selling $4 billion worth of Bitcoin through the decentralized exchange Hyperliquid. According to Nicolai Sondergaard, a research analyst at the cryptocurrency intelligence platform Nansen, this move highlights a "rotation" phenomenon, as altcoins seem to benefit from expanded corporate accumulation.
According to the Deribit skew indicator, Bitcoin put (sell) options are trading at a 7% premium compared to call (buy) instruments. This imbalance is common in bear markets, with the indicator remaining above the 6% neutral threshold for the past week. Whales and market makers lack confidence in whether the $108,000 support level can hold.
On Friday, a net outflow of $127 million from the U.S. spot Bitcoin exchange-traded fund provided another signal of unease among holders. Whether the sell-off stems from broader macroeconomic uncertainty or Bitcoin-specific weakness, traders are increasingly concerned, as reflected in BTC derivatives. Meanwhile, the yield on 20-year UK government bonds has surged to its highest level since 1998.
Investors are demanding higher returns to hold government bonds, indicating expectations of rising inflation or currency depreciation. In either case, rising long-term yields will increase the cost of future debt rollovers and new issuances. Even speculation around such risks could further strain national finances and potentially spill over into the Eurozone due to ongoing fiscal concerns.
According to CoinGlass estimates, if Bitcoin's price falls below $107,000, $390 million in bullish leveraged positions will face liquidation. Nevertheless, Bitcoin's near-term outlook may depend on U.S. labor market data released on Friday. A potential rise in the unemployment rate could serve as a positive catalyst for risk assets, as it would increase pressure on the Federal Reserve to accelerate interest rate cuts.
Related: Despite the decline in Bitcoin (BTC) and Ethereum (ETH) prices, crypto funds still recorded $2.5 billion in inflows.
This article is for general informational purposes only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: “As Whales Shift to Ethereum (ETH) and UK Bonds Surge, Can Bitcoin (BTC) Hold $109,000?”
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