Digital asset traders have refocused their attention in cryptocurrencies
by Sidhartha Shukla
Bitcoin sank to its lowest level in nearly seven weeks as the token retreats further from a record set in mid-August.
The largest cryptocurrency fell as much as 0.8% to $108,719 in early Asia trading on Tuesday before trimming some losses, while slipping below its 100-day moving average, according to data compiled by Bloomberg.
The decline comes with Ether gaining momentum as the hot pick for digital-assets traders, after it hit an all-time high of $4,955 on Sunday. Ether has also pulled back somewhat since the weekend, even as investors pile up bets that the second-largest token will continue to climb.
In August, US Bitcoin exchange-traded funds saw over $1 billion in net withdrawals, while Ether-linked funds drew inflows of $3.3 billion, in the clearest sign yet of an investor rotation in Ether’s favor.
For now though, backers of both tokens are nursing losses.
“It’s been a bloody start to the week for the majors, with over $900 million in liquidations across crypto markets,” said Sean Dawson, head of research at Derive.xyz. “The majority came from ETH ($324 million) and BTC ($209 million), and nearly all were long positions forced underwater after a broad-based correction.”
Derivatives data also suggests caution is building. Dawson noted that the 25-delta skew — a gauge of whether traders are paying more for downside protection than upside exposure — has turned negative for both Bitcoin and Ether, showing stronger demand for puts over calls. Traders are bracing for possible retests of $100,000 in Bitcoin and $4,000 in Ether, he added.
Bitcoin was trading at $110,095 and Ether at $4,420 as of 7:24 a.m. in London on Tuesday.
Copyright Bloomberg News
