Markets Rebound

Crypto markets staged a significant rebound on Wednesday, with Bitcoin reclaiming the $115,000 threshold and Ethereum crossing the $3,600 mark. Bitcoin gained approximately 1.3% over the past 24 hours, while Ethereum saw a more substantial jump of 2.8%.

ETF Flows Show Contrasting Trend

The recovery for Ethereum coincided with a return of inflows into Ethereum ETFs on Tuesday. Conversely, Bitcoin ETFs continued their streak of outflows for the second consecutive day.

• According to Farside Investors data, Ethereum ETFs attracted over $73 million on Tuesday.
• Bitcoin ETFs logged net outflows of $196 million, extending a downtrend from the previous day’s $333 million and Friday’s $819 million.

Volatility as Expected in Bull Market

Despite Bitcoin trading nearly 6% off its mid-July all-time high this week, analysts remain sanguine about the broader market trajectory.

“Historically, when you zoom in to prior bull markets, it’s never ‘up only.’ Instead, bull markets often are accompanied by volatility, and lots of it,” Ryan Rasmussen, Head of Research at Bitwise L.P., told Decrypt.

Further explaining the recent dip, Rasmussen noted: “The bull market we are currently in is no different. For starters, when prices run up to all-time highs, traders get over-excited, and they add leverage. Then, when the price moves down, they are forced to sell or get liquidated. That leads to short-term, whip-saw like sell-offs and rebounds.” A key driver during this week’s pullback was Liquidation activity hitting nearly $900 million on Friday.

Broader Market Perspective

Although Bitcoin, Ethereum, Solana, and Binance Coin all saw gains Wednesday (>1.8%), the overall crypto market showed minimal weekly losses (1-3%). Other assets like XRP (Ripple) also recovered losses.

Maintaining a long-term view, Rasmussen reiterated: “We are long-term oriented… We view the volatility along the way as an opportunity for investors to strategically position their portfolios for the long-term growth of crypto.”