Bulls take over after $770M in shorts wiped—What’s next?

The global crypto market did a major turnaround after bullish sentiments took over following Federal Reserve Chair Jerome Powell’s speech.

Powell used his final Jackson Hole address to hint at looming interest rate cuts. This ignited a sharp rally for Bitcoin (BTC), Ethereum (ETH), and other major altcoins. Data shows that nearly $770 million worth of long and short positions were liquidated in the last 24 hours. Bears got hammered the most during the fresh rally.

Bitcoin had been teetering near $112,000 last mid-week, but it roared back to breakthrough the $117 mark again. The cumulative digital assets market cap surged by more than 4% to regain $4 trillion. Its 24-hour trading volume is up by 79% to stand at $261 billion. The Fear and Greed Index remained “Neutral” while inching towards “Greed” territory.

$476M shorts wiped as bulls pushes ETH 

According to the data shared by CoinGlass, more than $476 million of short bets were liquidated over the last 24 hours. The largest single liquidation order of ETH-USDT-SWAP, worth $10 million, happened on OKX.

Ethereum stole the spotlight as it skyrocketed nearly 15% to hit a fresh all-time high just shy of $4,900. The bull frenzy managed to demolish the record made back in 2021. ETH price is now running up by 42% on a YTD basis. It has outperformed Bitcoin gains of 24% in the same period. Ripple’s XRP is the only crypto among the top 10 that outdid Ethereum in the parallel spell. Ethereum is trading at an average price of $4,714 at the press time. Its 24-hour trading volume has spiked by 129% to hit $80.25 billion.

Data shows that the market saw $384 million worth of long and short bets set on ETH price being liquidated over the last 24 hours. However, $272 million (71%) of the liquidated positions turn out to be short bets. This suggests that traders were hoping that Ethereum price would continue to struggle, but that was not the case.

ETH ETFs see $337M inflows while Bitcoin funds bleed

Bitcoin and Ethereum-linked US exchange-traded funds reported decoupling again. BTC ETFs saw $23.15 million flowing out of the funds on Friday. BlackRock’s IBIT was the only ETF that leaked funds. It posted almost $200 million in withdrawals. Meanwhile, Ark and 21shares bagged more than $65 million in inflows. BTC ETFs are on a streak of 6 days printing red indices.

On the other side, Ethereum ETFs recorded a huge inflow of $337.63 million on Friday. This suggests that investors have now shifted on ETH accumulation. Edul Patel, CEO of Mudrex, mentioned that ETH has now gained over 250% from April lows, outpacing Bitcoin. He added that the transactions on the Ethereum network jumped 63% in the past 30 days, while active addresses rose 26%. However, wallets holding over 10,000 ETH have risen by 200 since July. 

Behind the noticeable surge sits Powell’s message from Jackson Hole. Instead of doubling down on inflation worries, the Fed chair noticed that the downside risks to employment are rising. He even cautioned that labor market stress can “materialize quickly in the form of sharply higher layoffs.” These remarks fueled speculation that rate cuts could arrive as early as September. As of now, markets are now pricing in a chance of policy easing from the current 4.25%–4.5% range.

For crypto traders, the implications are pretty simple. Lower borrowing costs and looser liquidity conditions could extend the risk-asset rally into year-end.

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