Bitcoin continues to lose ground, now trading at $112,500, while Ethereum has returned to the $4,000 level, clearly aiming to break through it.

A sharp sell-off in US equities and stock indices has dragged down the cryptocurrency market as well. Investors, fearing further declines, began offloading risky assets en masse, including cryptocurrencies. The initial trigger for the sell-off was concern over the Federal Reserve's continued restrictive stance on interest rates. Recent inflation growth data is forcing the Fed to adopt tighter monetary policy measures, which negatively impacts economic growth prospects and, consequently, the appeal of risk assets.

Adding further pressure were corporate earnings reports from several major companies that fell short of analyst expectations, weighing on US stock markets. And as we have seen lately, the crypto market has been strongly correlated with equities, so the downturn in digital assets comes as no surprise.

Meanwhile, as markets correct, an interesting detail has surfaced: currently, about 6.38% of circulating Bitcoin is concentrated in Bitcoin ETFs, while Ethereum ETFs hold around 5.08% of total ETH supply. If current growth rates persist, by September ETH's share in ETFs could surpass that of Bitcoin.

At first glance, this may seem like a minor development, but it raises broader questions about supply-demand dynamics in the crypto markets. The growing share of ETH in ETFs points to rising institutional interest in Ethereum and its potential as a platform for decentralized applications and DeFi projects. The impact of ETFs on the underlying asset price cannot be overstated. Capital inflows into ETFs create additional demand, which can significantly push prices higher — Ethereum's more than 70% rally over the past few months is a clear reflection of this.

In Ethereum's case, surpassing Bitcoin's ETF share is unlikely to indicate a shift in institutional investors' perception of the dominant cryptocurrency. Rather, it may highlight speculative momentum, with investors eager to capture gains from what was, until recently, still considered an undervalued asset.

That said, it is important to remember that the cryptocurrency market remains volatile and influenced by multiple factors. Macroeconomic conditions, regulatory developments, and technological innovations can all have a significant impact on the prices of both Bitcoin and Ethereum. Therefore, despite positive trends, investors should remain cautious and make well-balanced decisions based on thorough market analysis.

Trading recommendations

Bitcoin

Buyers are currently targeting a rebound to $114,100, which would pave the way toward $116,000 and then $117,500. The more distant target is the $119,300 area, a breakout above which would confirm further bullish momentum. On the downside, buyers are expected to emerge around $113,200. A return below this zone could quickly drag BTC toward $110,600, with the final target at $108,500.

Ethereum

A firm consolidation above $4,237 would open the way toward $4,376. The ultimate target stands at $4,545, with a breakout signaling stronger bullish sentiment and renewed buyer interest. On the downside, buyers are expected near $4,077. A return below this area could pull ETH toward $3,941, with the final target at $3,827.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.