Bitcoin and Ether Set All-Time Highs as Fed Cut Hopes Fuel ETF Buying

Bitcoin jumped past $124,000 and Ether cleared $4,750 within hours of soft U.S. inflation data, a dovish Fed outlook and unstoppable ETF demand, yet BitMEX flags falling hashrate and potential bearish divergence with MACD as signs that a short dip may come before the next leg higher.

How Policy, ETFs and Macro Lifted Prices

Bitcoin’s rally began with Washington. The Trump administration let 401(k) plans hold crypto, passed the GENIUS Act on stablecoins and declared Bitcoin a strategic reserve asset; each step widened the buyer base and trimmed regulatory fear.

ETF flows turned that green light into cash. BlackRock’s IBIT alone commands over 50% of the $1.16 trillion poured into spot BTC funds, followed by Fidelity and VanEck. Ether funds are also catching up. Net inflows shot from $100 billion in mid-July to $142 billion by August 12, while options desks show $5K strike calls dominating open interest.

Macro tailwinds add punch. July CPI undershot forecasts, spurring bets on a September rate cut; Reuters notes traders now put the odds of Fed rate cuts at 99.9%. Lower real yields drive capital toward scarce digital assets.

Risk appetite is broad. U.S. and Asian equity indices set fresh highs the same week, and CoinMarketCap data place total crypto value above $4.18 trillion with $245 billion in daily turnover, the most since late 2021.

Finally, corporate treasuries and emerging-market states are joining in. Abu Dhabi’s sovereign fund seeded ETF creation units, while Pakistan drafted a Bitcoin reserve bill; BitMEX tallies $15.7 billion in institutional BTC and $13 billion in reserve ETH.

BitMEX Sees Near-Term Shakeout Before Next Climb

Technical cracks show first in Bitcoin’s engine room. Blockchain.com data reveal hashrate dropping 8% since August 7, even as price set higher highs, a classic divergence that often precedes a pullback. BitMEX charts a possible double-top at July’s $124K peak with support near $112K, the old May high; a break there could test $100K, though long-term trend lines stay intact.

Ether looks healthier. Analysts report ETH volume surging after $2.3 billion of ETF cash landed in six days, and traders now eye $6K to $13K targets once price discovery begins. Volatility has cooled. Yahoo Finance shows 30-day BTC swings under 40%, the lowest since 2023, inviting pensions that require stable variance.

Yet low volume cuts both ways. A sudden ETF outflow like the $465 million exit on August 5 could unsettle markets and reboot volatility. Macro risk remains. If inflation flares, the Fed could delay easing, removing a key catalyst. Reuters also warns that crypto’s link to tech stocks means any equity sell-off may drag coins lower.

Deductions

Bitcoin and Ethereum smashed records because policy, money flows and macro winds all blew the same way. BitMEX applauds the fundamentals – trillions in ETF and sovereign demand, a weaker dollar and clear U.S. rules – but also rings a bell on short-term overextension.

Hashrate slippage, MACD stress and crowded long positions hint at a shakeout. A quick drop to six-figure BTC and sub-$4.5K ETH would reset leverage without breaking the up-trend that began last winter.

For builders and investors, the playbook stays simple: plan for volatility yet position for the structural bid from ETFs, treasuries and nation-states. If those forces persist, today’s highs may read like mid-cycle prices in hindsight.