Asia Morning Briefing: BTC Fragility and ETH Rotation Signal Market Bracing for Consolidation Without New Liquidity

Good Morning, Asia. Here's what's making news in the markets:

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas.

Bitcoin is trading just below $110,000 after another failed bounce, down roughly 7% since peaking over $117,000 in the wake of Powell’s dovish Jackson Hole speech, according to CoinDesk market data. Ethereum, which briefly touched $4,900 before a sharp reversal, is holding above $4,300 but showing signs of exhaustion after weeks of outperformance.

The bull run is fraying, market observers say, as thinning liquidity, ETF outflows, and fragile onchain activity collide with whales rotating into ETH and retail longs getting liquidated. Yet beneath the surface, billion-dollar sovereign and institutional allocations are quietly scaling into volatility, creating a sharp divergence between weak short-term conviction and programmatic long-horizon buying.

Glassnode’s latest Market Pulse shows the cycle slipping from euphoria into fragility: spot momentum fading toward oversold territory, ETF flows swinging to a $1 billion outflow, and realized profits collapsing back to breakeven.

That fragility was underscored by QCP Capital, which traced this weekend’s crash to an early holder unloading 24,000 BTC into thin liquidity, a move that cascaded into $500 million in liquidations. QCP said the sale exposed just how brittle the market has become with ETFs bleeding $1.2 billion in outflows even as whales rotate into ETH, pushing the ETH/BTC cross through 0.04.

Singapore-based market maker Enflux picks up that thread, arguing that not all flows are created equal.

While retail longs were blown out, a $2.55 billion ETH stake routed through a single contract and the UAE royal family’s $700 million BTC exposure via Citadel Mining looks less like speculative punts and more like sovereign and institutional allocations.

In other words, even as Glassnode’s onchain data shows weakening address activity and fee volumes, there are counterparties deliberately using volatility to scale into size.

The result is a divergence: retail leverage continues to get flushed, while long-horizon allocators quietly accumulate.

But with transaction fees collapsing back toward decade lows and blocks clearing with little congestion, liquidity on the Bitcoin blockchain itself looks thin. That’s a problem for miners already squeezed by halved rewards, and it leaves the broader market bracing for consolidation, or deeper drawdowns into September, historically Bitcoin’s weakest month.

Market Movement

BTC: Bitcoin’s brief rebound from its weekend plunge failed Monday, with prices rejected at $113,000 before sliding to a seven-week low near $109,700, down 2.7% on the day and 7% from Friday’s post-Powell peak above $117,000.

ETH: Altcoins buckled Monday with ETH dropping nearly 8% below $4,400 and SOL, DOGE, ADA, and LINK sliding 6–8%, triggering $700 million in liquidations, mostly from over $627 million in long bets.

Gold: Gold is holding above $3,350 as Powell’s dovish Jackson Hole remarks boost rate-cut bets and geopolitical tensions sustain safe-haven demand, even as dollar strength and upcoming U.S. growth data loom as headwinds.

Nikkei 225: Asia-Pacific stocks fell Tuesday, with Japan’s Nikkei 225 and Topix down 0.54%, as investors weighed Trump’s China comments and U.S.–South Korea trade talks on planned 15% tariffs.

S&P 500: U.S. stocks pulled back Monday from a rate-cut-fueled rally, with the S&P 500 down 0.4% as focus turned to Nvidia’s upcoming earnings.

Elsewhere in Crypto:

• Grayscale Files to Convert Avalanche Trust to ETF (Decrypt)
• Japan's Finance Minister Says Crypto Assets Can be Part of Diversified Portfolio (CoinDesk)
• Venture trends, regulatory wins, and consumer innovation: Tom Schmidt and Alok Vasudev on crypto’s new era (The Block)