Bitcoin News Today: Ether Gains Investor Favor as Bitcoin Retreats Below $110K

Bitcoin faces renewed downward pressure as traders reassess Federal Reserve policy expectations, with the price retreating below the critical $110,000 level and ether experiencing sharper losses of 8% [1]. This shift reflects broader concerns about inflation remaining resilient, casting doubt over the likelihood of an aggressive Fed rate cut in September. The core Personal Consumption Expenditures (PCE) price index, scheduled for release on Friday, is anticipated to show a 0.3% monthly rise and an annual increase of 2.9% [2], which could further complicate the Fed's decision-making process. A deviation from these projections could significantly impact cryptocurrency prices and broader market sentiment.

Whale activity and ETF flows are indicating a strategic shift in institutional investments, with large holders reportedly liquidating $2 billion in Bitcoin to acquire ether positions. This move reflects a growing preference for ether among institutional investors, who are increasingly allocating capital to crypto treasuries [1]. Meanwhile, Bitcoin spot ETFs have recorded substantial net outflows of $1.2 billion over the past week, while ether ETFs have attracted $151 million in net inflows [1]. These trends suggest a divergence in investor sentiment and a more cautious approach to Bitcoin's near-term prospects.

Derivative markets offer additional insight into trader psychology, with Deribit options data showing a divided outlook on Bitcoin’s near-term direction. Call options expiring on 26 September with $140,000 strike prices have open interest comparable to $95,000 put options, indicating a wide range of expectations for price movement [1]. This volatility is reinforced by the $45,000 spread between these levels. In contrast, ether options show a more constructive bias, with heavy call interest clustered around $4,000 and $4,500 strikes, potentially creating technical support [1].

Technical indicators further highlight Bitcoin’s weakening condition, with the relative strength index (RSI) falling below the neutral 50 level and the price fitting into an Elliott Wave Theory corrective pattern [1]. This selloff could represent the initial phase of a deeper correction, with the $110,000 level currently acting as a key support point. Should this level fail, the next level of support is expected around $105,400, derived from a Fibonacci retracement of the recent rally. On the other hand, any recovery in Bitcoin is likely to face stiff resistance near $117,400, a level that previously acted as a ceiling [1].

Ether, while down alongside Bitcoin, shows more resilience in several technical indicators. The RSI remains above 50, indicating that bullish momentum has not been entirely eroded [1]. Ether is currently trading above all major moving averages, with the 20-day moving average serving as a critical support level. A successful hold here could signal the end of the corrective phase and potentially lead to another push toward record highs. However, a breakdown below this level would shift focus to lower support levels, where longer-term investors may step in to provide additional buying interest [1].

The upcoming core PCE release is seen as a key catalyst for both the Fed's policy outlook and market sentiment, with the potential to influence the trajectory of cryptocurrencies. A higher-than-expected reading, especially if combined with strong employment data, could delay the anticipated rate cut and exacerbate the downward pressure on risk assets [2]. Conversely, a softer inflation report could restore investor appetite for equities and cryptocurrencies, potentially stabilizing the market. As the data is released and digested, the market will closely watch how traders and investors adjust their positions in response to the new economic landscape.

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