Bitcoin rally fades after Powell’s speech
Bitcoin slipped to $112,700 over the weekend after a short-lived rally sparked by U.S. Federal Reserve Chair Jerome Powell’s dovish remarks at Jackson Hole. Powell hinted at a potential interest rate cut in September, which initially pushed Bitcoin above $117,000 on Friday.
But momentum quickly faded. Analysts say the rally was fueled by thin liquidity rather than strong conviction. Once leverage unwound, the market recalibrated, sending Bitcoin lower.
“Bitcoin’s spike after Powell’s speech was driven by thin liquidity, not lasting conviction,” said Vincent Liu, CIO at Kronos Research. “Without fresh catalysts, BTC quickly dropped back below key levels.”
Whale selling sparks flash crash
Market watchers point to massive whale transactions as a key driver of the decline. A wallet reportedly sold over 24,000 BTC between August 16 and 24, triggering a cascade of panic selling.
Screenshots shared by WhaleWire CEO Jacob King suggest that wallet “19D5J…WoZ1C” moved multiple batches of 3,000 to 6,000 BTC. According to King, much of this capital flowed into Ethereum, with around $2 billion in ETH purchases and $1.3 billion staked.
“Once the whale started selling, it triggered a panic cascade, with other traders selling too,” King wrote on X.
Still, Kronos’ Liu cautioned against pinning the sell-off on a single player. “It’s more likely the work of multiple whales or exchanges with large holdings,” he noted, pointing to possible institutional activity.
Bitcoin to Ethereum migration grows
The shift from Bitcoin to Ethereum has become increasingly visible. Blockchain analytics firm Lookonchain reported last week that a whale wallet converted part of its 100,784 BTC into 62,914 ETH while also opening a 135,265 ETH derivatives long position.
Institutional flows echo this trend. Spot Ether ETFs have attracted larger inflows compared to modest BTC ETF movements in August, signaling growing institutional confidence in Ethereum.
“With ETH ETF staking approval on the horizon, expect increased staking activity and potential altcoin outperformance,” Liu said.
Nick Ruck, director at LVRG Research, added that high-value holders appear to be rotating into ETH, viewing it as a stronger bet amid Ethereum’s corporate adoption and staking growth.
Bitcoin dominance weakens as Ethereum hits new highs
Bitcoin’s dominance has fallen to 57.9%, down from 61% earlier this month, showing a clear shift in investor focus toward altcoins. Ethereum, meanwhile, is trading around $4,712 after hitting a new all-time high above $4,946 last Friday.
Ruck suggests this signals a structural market shift. “Large holders are betting on Ethereum’s upward potential, backed by ETF inflows and staking demand,” he said.
Outlook: more crypto market volatility ahead
In the near term, volatility is likely to continue. Traders are watching key U.S. macroeconomic indicators, including Thursday’s jobless claims, which could further influence risk sentiment across Bitcoin, Ethereum, and the wider crypto market.
