On Thursday (August 21), Bitcoin stabilized around $114,610 in the Asian market, recovering part of last week's losses, while Ethereum performed even better, surging 5.8% to $4,370.73, as investors engaged in selective rotation within the market.

Altcoins exhibit unusual resilience while Bitcoin's dominance approaches a six-month low. The CoinDesk 20 index, representing the performance of the largest crypto assets, rose 3.5%, trading above 4,078 points.

The Federal Reserve's minutes once pressured Bitcoin.

Yesterday, within an hour after the Federal Reserve released the minutes of the July monetary policy meeting, Bitcoin and Ethereum briefly declined before rebounding. The minutes revealed that two dissenting governors at the Federal Open Market Committee (FOMC) failed to persuade other members to support their stance.

The minutes disclosed: "A few members expressed a desire to reduce the federal funds rate target range by 25 basis points at this meeting. These members believe that excluding tariff factors, inflation is close to the Committee's 2% target, and higher tariffs are unlikely to have a lasting impact on inflation."

Federal Reserve Governor Christopher Waller and current Vice Chair (Supervision) Michelle Bowman have been signaling support for an early interest rate cut. Rate cuts typically release capital, thereby boosting the crypto market.

Since 1993, there has not been a case where two governors dissent simultaneously. The last time a governor expressed dissent alone was in September 2024, when Bowman favored a 25 basis point rate cut rather than the 50 basis points ultimately decided by the Federal Reserve.

While many traders will focus on Fed Chairman Powell's speech at the Jackson Hole central bank annual meeting on Friday, the meeting minutes have already provided a 'temperature check' on governors' views.

Meanwhile, US President Donald Trump continues to pressure the Federal Reserve to cut interest rates, including threatening to fire Fed Chairman Powell, although he has yet to take action.

The Federal Reserve's policy remains the biggest uncertainty in the market. The market is holding its breath for Powell's speech at Jackson Hole, worried that a hawkish stance will withdraw liquidity from speculative assets.

After a record-breaking July, Bitcoin weakened in August, coinciding with the stagnation of the Nasdaq and S&P 500 under interest rate pressure. Institutional ETFs were not spared: over $1 billion in funds flowed out on August 18-19, coinciding perfectly with the timing of the bond market repricing rate cut expectations. The message is clear—crypto ETFs are now closely tied to Wall Street's liquidity cycle, not just depending on on-chain activity.

The rotation of funds between Bitcoin and Ethereum

Bitcoin hovers above $114,000, but its support is becoming increasingly fragile as the fund flows from exchange-traded funds (ETFs) send conflicting signals. In July, Bitcoin ETFs recorded a net inflow of $6.02 billion, but in August, there was a sharp reversal, with a current net outflow of $139.5 million.

A notable feature of 2025 is the rotation of funds between Ethereum and Bitcoin ETFs. In the week ending August 15, the US spot Ethereum ETF astonishingly recorded an inflow of $2.85 billion, nearly double Bitcoin's $548 million. This drove ETH above $4,000, nearing its historical high. But within days, the situation reversed: on August 18-19, ETH ETFs saw a single-day outflow of $422.2 million, compared to Bitcoin's outflow of $523.3 million.

OKX Singapore CEO Gracie Lin stated in a statement to CoinDesk that the rising ETH/BTC ratio indicates that capital is shifting towards Ethereum's relative strength, while Bitcoin is in a consolidation phase.

"Crypto capital is becoming more selective," Lin told CoinDesk. She emphasized that this is not a comprehensive 'altcoin season,' but rather a targeted capital flow towards ETH, with macro factors such as the Jackson Hole central bank annual meeting and upcoming US inflation data becoming catalysts.

Latest data from CryptoQuant explains why Bitcoin's bullish momentum has cooled. The report states that apparent demand has dropped from 174,000 BTC in July to 59,000 BTC today, while ETF fund inflows have fallen to their weakest level since April.

Profit-taking remains heavy; on August 16 alone, 'whales' realized $2 billion in gains, bringing the total profit realized since July to $74 billion. CryptoQuant analysts now categorize the market as being in a 'bull market cooling' phase, with $110,000 seen as an important support level.

Analysts from Singapore's market maker Enflux noted in a statement to CoinDesk that retail enthusiasm for the 'altcoin season' has significantly decreased compared to last week, although strategic bets like BNB reaching an all-time high and the operational strength of Hyperliquid continue to attract capital.

"This indicates that the altcoin market is no longer a single cohesive trade; as macro confidence gradually forms, capital becomes more selective and concentrated, with institutions also following suit," the company stated.

As a result, the market is no longer characterized by widespread gains but is driven by a few winners, with Ethereum setting the tone—capital remains in the crypto market, but flows are becoming more focused, favoring resilience over speculation.

Bitcoin Technical Analysis

Despite ETF allocations reaching unprecedented levels—US spot Bitcoin ETFs controlling a total of $146.2 billion, equivalent to 6.47% of Bitcoin's market cap—price performance remains weak. BTC has repeatedly failed to reclaim the $117,500 resistance, with the 50-day moving average at $116,033 acting as a ceiling. On August 20, BTC's trading volume shrank to $10.8 billion, further reinforcing the bearish outlook.

Analysts emphasize that key support levels are at $111,982 and $110,053, with a potential 'liquidity wall' around $105,000, where large buy orders are lurking. The RSI and MACD indicators remain bearish, suggesting that if capital flow fails to stabilize, there is still room for a decline.

After Bitcoin's price closed below the $115,500 level, it began a new round of declines. BTC gained downward momentum and fell below the $113,500 support zone. The price further dropped below the $113,000 support area and the 100-hour moving average, testing the $112,500 region. It reached a low of $112,400, and the current price is attempting to rebound, targeting the 23.6% Fibonacci retracement level of the drop from the $124,420 high to the $112,400 low.

Bitcoin is currently trading below $115,000 and below the 100-hour simple moving average. Immediate resistance to the upside is near $114,800. A key descending trendline has also formed on the BTC/USD hourly chart, with resistance near $114,800. The first key resistance level is at $115,000. The next resistance may be at $115,500. If it can close above the $115,500 resistance level, the price may rise further. In this case, the price is expected to rise and test the $118,400 resistance level, which is close to the 50% Fibonacci retracement level of the drop from the $124,420 high to the $112,400 low. If it continues to rise, the price may approach $120,000, with the main target possibly being $121,500.

If Bitcoin fails to break through the $115,000 resistance zone, it may initiate a new round of declines. Immediate support is at $113,500. The first major support level is around $112,400. The next support is in the $111,500 area. If further losses occur, the price may fall toward $110,000 in the short term. The main support is around $108,000; if this level is breached, BTC may face significant damage.

Technical Indicators:

Hourly MACD: The MACD is gradually losing momentum in the bearish zone.

Hourly RSI (Relative Strength Index): The RSI for BTC/USD is currently above the 50 level.

Key support levels: $113,500, followed by $111,500.

Key resistance levels: $115,000, followed by $115,500.