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Markets took a hit this week as crypto-linked exchange-traded funds (ETFs) saw sharp outflows, wiping about $60 billion from global capitalization in just 24 hours. The pullback reflects investors bracing for signals from Federal Reserve Chair Jerome Powell’s upcoming speech at Jackson Hole — a moment Wall Street is watching closely.
Investors on edge
Bitcoin slipped to around $115,000, down over 3% in the past week, breaking through key technical supports. More than $190 million worth of long positions were liquidated in the process, highlighting just how defensive traders have become.
In the ETF space, the numbers were striking. U.S. Bitcoin ETFs reported net outflows of $121.7 million on Monday, while Ethereum ETFs saw their largest single-day withdrawal since launch, with $196.6 million redeemed. That ended a 15-week streak of positive inflows, raising questions about whether institutional appetite is cooling or if this is simply profit-taking after a strong rally.
Meanwhile, the U.S. dollar index has gained 3% since July, and rising bond yields are drawing capital away from higher-risk assets like crypto. According to the widely tracked Crypto Fear & Greed Index, sentiment has slipped to a neutral 53, down from 56 the week before.
The next levels to watch for Bitcoin
Despite the pullback, both Bitcoin and Ethereum remain far above where they were earlier this year. Bitcoin, which recently hit record highs above $124,000, is now testing critical support zones at $115,000 and $114,000.
If prices hold, a rebound toward $118,000 could be on the cards, with resistance seen at $120,000–$122,000. A break above $122,000 could reopen the path to fresh all-time highs and even a Fibonacci target near $130,000. On the flip side, losing $114,000 could set the stage for a correction toward $110,000 or even $108,000 — levels that have acted as strong technical support since June.
Market watchers, including analysts at Bloomberg and CoinDesk, stress that trading volume and moving averages will be key indicators in the coming days. A recovery in buying pressure would support another bullish leg, while failure to hold support risks sending Bitcoin toward the 200-day moving average near $105,000.
Why this matters for investors
The recent ETF withdrawals underscore how closely crypto markets are now tied to broader macroeconomic signals. Powell’s speech on August 22 may provide clarity on interest rate cuts, with markets currently pricing in a potential 25 basis point reduction in September.
For long-term investors, Ethereum ETFs still hold over $22 billion in assets under management, up 43% in the past month — a sign that institutional demand remains intact despite short-term volatility.
In the end, whether this downturn is the start of a deeper correction or just a pause after a hot summer rally may depend less on crypto itself and more on the Fed’s next move.
