Crypto Markets Consolidate as Spot ETFs Underperform

Cryptocurrency markets consolidated on Tuesday after a blistering week.

Bitcoin (BTC) edged up 0.3% to $63,400, while Ethereum (ETH) dipped 1.4% to $2,638. Polkadot (DOT) and Solana (SOL) climbed 3%, signaling some altcoins are still attracting interest.

Dogwifhat (WIF) surged 15%, followed by Celestia (TIA), which climbed 10%, leading the top 100 digital assets by market capitalization.

In the last 24 hours, over $91 million in leveraged positions were liquidated across cryptocurrency markets, according to data from CoinGlass. Bitcoin and Ethereum alone contributed more than $10 million in short liquidations. Short positions, bets that an asset's price will fall, usually get liquidated when prices rise quickly.

Ether ETFs Record Major Outflows

Ethereum ETFs recorded the most significant outflows since July, with $79 million withdrawn on Monday. This occurred after ETH rallied 11% last week, driven by expectations of further interest rate cuts from the Federal Reserve.

Data from Farside Investors revealed that Grayscale's Ethereum Trust (ETHE) suffered outflows of $81 million. Since the launch of Ethereum ETFs on July 23, Grayscale has shed $2.8 billion out of the $9.2 billion initially held in the fund. Other ETH ETFs recorded no outflows, while Bitwise’s Ethereum WETH Fund (ETHW) had $1.1 million in inflows.

Meanwhile, Bitcoin spot ETFs recorded $4.5 million in inflows on Monday.

China’s Liquidity Injection

The People’s Bank of China (PBOC) on Tuesday announced plans to inject approximately $140 billion into the financial system through a 50 basis point cut to the reserve requirement ratio (RRR). This move comes as China looks to bolster its economy, which has been suffering from a real estate crisis and sluggish growth.

Alongside the RRR cut, the PBOC lowered the seven-day reverse repo rate by 20 basis points to 1.5%, while also reducing the minimum down payment for mortgages to 15%. These actions are designed to ease financial pressures and revive China’s struggling property market.

While the cryptocurrency markets stagnated, U.S. stock markets rose on Tuesday. The Dow Jones Industrial Average gained 0.1%, the S&P 500 climbed 0.2%, and the Nasdaq rallied 0.5%.