As Asian trading opened on Wednesday (August 27), Bitcoin attempted to hold the $110,000 level, but weak on-chain activity and $940 million in liquidations indicated that momentum was weakening. Meanwhile, Ethereum attempted to regain $4,600 after consolidating at high levels, below a recent record high of $4,946, driven by institutional inflows.

Bitcoin's rebound last Friday was short-lived, as the asset faced resistance at $117,000 over the weekend and then entered a new round of declines on Sunday night and Monday morning. Most altcoins also turned down, with Ethereum seeing a daily decline of over 3%, while XRP fell below the key support level of $3.

Last week was quite tough for this mainstream cryptocurrency, with its price mostly in a gradual downward trend. The peak came last Friday, when Bitcoin fell to near $112,000, a several-week low, before the highly anticipated speech by Fed Chairman Powell. With Powell hinting at potential future rate cuts, Bitcoin reacted immediately, surging above $117,000, but quickly fell back to $115,000, maintaining that range for most of the weekend.

The market had originally expected more action on Monday, but the situation reversed on Sunday night. Bitcoin suddenly plummeted by thousands of dollars, breaking below $111,000, marking the lowest level since July 10.

While the price briefly rebounded above $113,000, bears seem to be in control, pushing Bitcoin far below $112,000. At the time of writing, its market cap has fallen to $2.225 trillion, with its market share on CG just above 56%.

Most altcoins also experienced declines on the daily level. Ethereum previously reached a new all-time high of $4,950 but has now fallen below $4,600. XRP faced resistance at $3.1 and is currently struggling below the critical support level of $3. SOL, ADA, TRX, DOGE, XLM, and LINK all recorded similar declines. SUI, LTC, AAVE, PEPE, ENA, MNT, OKB, UNI, and ETC saw even larger drops, with daily declines reaching 7%-8%.

Pullback approaching

The total market capitalization of the cryptocurrency market has plummeted by about $200 billion since yesterday, currently at $3.93 trillion.

In fact, earlier this month, both Bitcoin and Ethereum reached all-time highs, benefiting from expectations of monetary easing and rising institutional demand. However, blockchain analytics firm Santiment warned that market sentiment may be overheating. The company noted in a report released on Sunday that the optimism surrounding a possible rate cut by the Fed in September has reached levels that often signal a correction.

Santiment stated: 'While optimism for rate cuts is driving the market, social data suggests caution is needed.' The company pointed out that online discussions about the Fed's decisions have surged. If easing expectations fall short, a 'rapid correction' may occur in the market.

Traders are currently focused on the Personal Consumption Expenditures (PCE) price index set to be released on Friday, which is seen as an important signal for the Federal Reserve's next steps.

Ethereum's gains far exceed those of Bitcoin

Market data shows that Ethereum has outperformed Bitcoin in the past 30 days, rising by 20%, while Bitcoin has dropped by 6% over the same period. Despite a smaller market cap, trading volume indicates that the liquidity held by ETH has surpassed that of BTC.

The probability of Ethereum reaching $5,000 this month has risen to 26% on Polymarket, up from just 16% a few days ago, as traders bet on institutional accumulation and momentum from BTC-ETH fund flows.

March Zheng, partner at Bizantine Capital, noted in a report to CoinDesk: 'Ethereum's recent strength is mainly reflected in the level of fund inflows, as institutions have established an important liquidity bottom.'

He added that the ETH/BTC ratio was previously at a local low, and a rebound is imminent, with stronger fundamental support this cycle, such as the adoption of global stablecoins and a clearer regulatory environment.

Market maker Enflux noted in a report sent to CoinDesk that market rotation also provided a backdrop for this rally. XRP led the pack alongside ETH, while funds chased new narratives, such as the CRO rally driven by Trump's media's 'Cronos Treasury' plan.

Hyperliquid's trading volume surpassed Robinhood in July, highlighting that retail speculation is shifting to native infrastructure, with its token HYPE recording double-digit gains. Enflux noted that these undercurrents suggest that what truly matters is not the daily closing price, but the structural redistribution of liquidity in the entire crypto market.

Market observers say liquidity is being redistributed across the entire crypto market, but Ethereum's central role is strengthened by institutional confidence.

Gracie Lin, CEO of OKX Singapore, stated in a report to CoinDesk: 'The market reacts to news, but long-term value is driven by fundamentals. This is why Ethereum can continue to show strength with real utility—despite price corrections, large-scale ETH accumulation by institutions like BitMine proves its deep belief in the core position of crypto. With macro data such as the US PCE being released this week, we will see if this belief can withstand volatility.'

Bitcoin Technical Analysis

Bitcoin's price initiated a new round of declines after closing below $112,500. BTC gained bearish momentum, breaking below the $112,000 support zone. The price further fell below the $110,500 support level and the 100-hour simple moving average, testing the $108,750 area. The lowest point was $108,734, after which the price began to rebound, returning above $111,200.

The price has broken through the 23.6% Fibonacci retracement level of the decline from the recent high of $117,354 to the low of $110,692. Currently, the Bitcoin trading price is below $111,500 and the 100-hour moving average.

Immediate resistance on the upside is near $111,500. A key downward trend line has also formed on the BTC/USD hourly chart, with resistance near $111,550. The first key resistance level is at $112,000, and the next resistance may be at $113,000, corresponding to the 50% Fibonacci retracement of the decline from the $117,354 high to the $110,692 low. If it can close above the $113,000 resistance, prices could rise further. In this case, BTC may rise and test the $114,200 resistance level. If it breaks again, prices may target $115,500, with the main target possibly at $116,500.

On the downside, if Bitcoin fails to break through the $111,550 resistance zone, a downward move may reopen. Immediate support is at $110,500, with the first major support near $109,200. The next support level is in the $108,500 area. If further declines occur, prices may head towards the $106,500 support. Major support is at $105,500, and if this level is breached, Bitcoin could accelerate its downward movement.

Technical Indicators:

Hourly MACD: MACD momentum is weakening in the bearish zone.

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

Key support levels: $108,500, followed by $106,500.

Key resistance levels: $111,500, followed by $113,000.