Bitcoin is approaching a seven-week low. When will it return to growth?

Bitcoin fell to its lowest level in seven weeks, having come under pressure from several factors at once: profit taking by investors and the flow of funds into Ether, the second largest cryptocurrency in terms of capitalization. Over the day, the total volume of liquidated positions exceeded $900 million - mostly long positions in the expectation of growth, which turned out to be a loss. Against this background, Ether has updated its historical maximum, and funds are recording opposite capital flows: billions are being withdrawn from BTC, while new investments continue to flow into ETH.

Bitcoin fell to its lowest level in almost seven weeks, continuing its retreat from the record set in mid-August. The largest cryptocurrency was down 0.8% to $108,719 during morning trading in Asia on Tuesday, before cutting some of its losses but falling below its 100-day moving average, data compiled by Bloomberg show. At the time of publishing this text, bitcoin was trading at $109,640, the CoinGecko service shows. That's 12% below the record high.

Other cryptocurrencies were also declining. Cardano was losing at the moment 3.8%, Ethereum was falling by 4%, Solana - by 5.2%, XRP - by 2%, according to data from the Kraken crypto exchange.

Bitcoin correction took place against the backdrop of Ether's growing popularity among traders: on Sunday, the second most capitalized cryptocurrency updated its historic high at $4955. By the time of publication of this text Ether has slightly corrected and traded at $4416, although investors continue to bet on its further growth, writes Bloomberg.

However, "even after the correction, liquidity and volumes remain supportive," Kaiko analysts said in a research note on Monday, cited by Barron's.

In August, U.S. bitcoin exchange-traded funds recorded outflows of more than $1 billion, while Ether-related funds, in contrast, attracted $3.3 billion, the clearest signal yet of investor overflow in Ether's favor, Bloomberg notes.

"The week started out extremely rough for the leading tokens, with cumulative liquidations in the crypto markets exceeding $900 million, with the majority coming from ETH ($324 million) and BTC ($209 million), and almost all of these were long positions that went negative after a massive correction," said Sean Dawson, head of research at Derive.xyz.

But investors continue to wait for new drivers for bitcoin, notes Barron's. After Fed Chairman Jerome Powell's speech about possible interest rate cuts, the token did not show a noticeable rebound, while the stock market rose on these expectations. Typically, risky assets benefit from easing rates and cheaper borrowing as they become more attractive compared to bonds and other fixed-income instruments, the publication says.

This article was AI-translated and verified by a human editor