BITCOIN and Ether clawed back from steep losses on Tuesday (Aug 6) after a bout of risk aversion in global markets spilt over into crypto.
Bitcoin inched back to top US$56,000 while second-ranked token Ether rose as much as 4.9 per cent to more than US$2,500. The moves represent a partial recovery from a frantic sell-off on Monday that saw Bitcoin sink below US$50,000 for the first time since February. Ether suffered at one point its steepest fall since 2021.
The rout marks the first major stress test for digital assets since a group of spot-Bitcoin and Ether exchange-traded funds (ETFs) debuted in the US in January and July, respectively.
Ether ETF investors bought the dip to the tune of a US$49 million net inflow for the crop of nine products, according to data collected by Bloomberg, more than offsetting outflows from the Grayscale Ethereum Trust.
The Bitcoin ETFs suffered a US$168 million net outflow on Monday, following heavy outflows last week. Bitcoin was trading up about 3.9 per cent at US$56,500 and Ether was around 2 per cent higher at US$2,495 as of 4.35 pm on Tuesday in New York.
Solana’s SOL was one of the biggest gainers among altcoins, with the native token of the blockchain favoured by memecoin issuers jumping as much as 14 per cent. It had tumbled by as much as 20 per cent on Monday.
But the gains in Bitcoin, Ether and other tokens on Tuesday may be short-lived without a broad improvement in the macro-economic environment and an easing of tensions in the Middle East.
“We are seeing buying on the dip,” said Sean McNulty, director of trading at Arbelos Markets. “But generally sentiment is still cautious on concerns that this is the start of a larger deleveraging process,” he added. Total liquidations in bets on crypto were about US$1.1 billion on Monday, one of the largest recordings since early March this year, according to Coinglass data.
Still, some traders believe a quick turnaround is possible. “It was only nine days ago that the BTC community was arguably the most bullish it’s ever been,” said Rich Rosenblum, co-chief executive officer and co-founder of GSR Markets. “BTC could rally back to US$70,000 plus, just as quick as it sold off.” BLOOMBERG
