Bitcoin’s Hold On $109K At Risk As Whales Choose ETH, Bonds Soar

Key takeaways:

• Bitcoin whales rotating billions of dollars into Ether highlight weakening conviction in Bitcoin’s $108,000 support among major players.

• Bitcoin derivatives show rising liquidation risks with $390 million in leveraged longs at peril below $107,000.

Bitcoin (BTC) has traded within a narrow 2.3% range since the sharp decline from $112,500 on Friday. The absence of momentum can partly be attributed to regulated markets being closed for the US Labor Day holiday, but Bitcoin derivatives markets indicate a growing lack of confidence in the $108,000 support level.

The Bitcoin monthly futures annualized premium currently sits at 7%, which is firmly within the neutral 5% to 10% range and flat compared to the previous week. The indicator last showed signs of bullishness on Aug. 24, following the rally to $117,000 after US Federal Reserve Chair Jerome Powell’s speech raised hopes for a less restrictive monetary policy.

Bitcoin price decouples from gold amid whale selling pressure

The price of gold has gained 2.1% since Friday, worsening Bitcoin traders’ sentiment as the cryptocurrency posted a 12.5% decline from the Aug. 14 all-time high. Investors are questioning whether the recent downturn reflects broader risk aversion or factors unique to Bitcoin, particularly after some long-time holders decided to liquidate part of their positions.

A Bitcoin whale who had previously held for more than five years began rotating funds into Ether (ETH) on Aug. 21, selling $4 billion worth of Bitcoin through the decentralized exchange Hyperliquid. The movement highlights a “rotation” as altcoins appear to benefit from expanding corporate accumulation, according to Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen.

Bitcoin put (sell) options are trading at a 7% premium compared to call (buy) instruments, according to the Deribit skew metric. This type of imbalance is common in bearish markets, and the indicator has remained above the neutral 6% threshold for the past week. Whales and market makers show little confidence that the $108,000 support level will hold.

The $127 million net outflows from US spot Bitcoin exchange-traded funds on Friday provide another sign of discomfort among holders. Whether the sell-off stems from broader macroeconomic uncertainty or Bitcoin-specific weakness, traders are increasingly concerned, as reflected in BTC derivatives. Meanwhile, yields on United Kingdom 20-year government bonds surged to their highest levels since 1998.

Related: Is Warren Buffett’s growing cash pile a bad sign for stocks and Bitcoin?

Investors are demanding higher returns to hold government bonds, signaling expectations of either stronger inflation or depreciation of domestic currencies. In either case, rising long-term yields increase financing costs for future debt rollovers and new issuance. Even speculation around such risks could further strain national finances and potentially spill over into the eurozone due to ongoing fiscal concerns.

$390 million in bullish leveraged positions face liquidation if Bitcoin’s price falls below $107,000, according to CoinGlass estimates. Still, the near-term outlook for Bitcoin likely hinges on US job market data due Friday. A potential uptick in unemployment could act as a positive catalyst for risk-on assets, as it would increase pressure on the Federal Reserve to accelerate interest rate cuts.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.