Gold Reaches All-Time High of $3.5K as Investors Shift from Bitcoin to Ethereum

By Omkar Godbole (All times ET unless otherwise stated) Despite the relatively quiet major crypto market activity following the North American holiday on Monday, two distinct trends are evident - the continued surge of gold to historical highs and the struggles of bitcoin to gain upward momentum. Concurrently, there's an ongoing shift of funds from bitcoin to ethereum. This morning, gold reached a record high of $3,500 per ounce, driven by increasing bets on potential Federal Reserve interest rate cuts, a deteriorating fiscal outlook for major economies, and heightened political interference in Fed policy. Gold-backed tokens such as PAXG and XAUT initially followed this trend but have since experienced a pullback, similar to the metal itself, in what appears to be a normal pause within a bull trend. In contrast, while bitcoin briefly surpassed $110,000, it remains below crucial resistance levels, including the Ichimoku cloud. According to data from Lookonchain, a whale address, 0xFf15, sold 425 BTC worth $46.5 million and acquired over 10,500 ETH in the past four days. On-chain data analyzed by Alphractal indicates subdued engagement on the Bitcoin network. Active addresses decreased to 690,000 last week, and transaction fees remain low. However, transfer volumes surged to $10.8 billion, reflecting large entity repositioning rather than broad retail activity, as stated by the analytics firm in a Telegram chat. Meanwhile, Vibes Capital Management's Frank Fetter published an interesting indicator note on X, stating that an indicator linked to the short-term holder market value-to-realized value has reached levels similar to those seen at bottoms in August last year and April this year. This raises the question of whether we are witnessing a third such bottom, only time will tell. Some alternative coins experienced notable movements. The Trump-linked WLFI token saw a sharp decline, dropping to 25 cents from 33 cents shortly after its Sunday trading debut. In contrast, Hyperliquid's HYPE token surged over 3% after reaching a record $100 million in revenue in August, with perpetual trading volumes exceeding $400 billion. Traders on the decentralized betting platform Polymarket have assigned a 98% chance that France's September 8 confidence vote will fail. This could lead to a sharp increase in peripheral bond yields, including those in France, relative to those in Germany, potentially reviving memories of the EU debt crisis, weakening the euro against the dollar, and putting downward pressure on bitcoin. In traditional markets, commodity trading advisor (CTA) positioning in U.S. equities is at its maximum long position at the 100th percentile, signaling extreme bullishness, according to observer David Merlin. President Donald Trump is reportedly set to speak later on Tuesday. The yen weakened after the Bank of Japan hinted at potential rate hikes, although the timing remains uncertain. With a data-heavy week ahead, culminating in Friday's U.S. non-farm payrolls, increased volatility is expected. It is essential to remain alert. Key Events to Watch Token Events Conferences The CoinDesk Policy & Regulation conference, formerly known as State of Crypto, is a one-day boutique event held in Washington on September 10, allowing general counsels, compliance officers, and regulatory executives to meet with public officials responsible for crypto legislation and regulatory oversight. Space is limited. Token Talk By Shaurya Malwa Derivatives Positioning By Omkar Godbole Market Movements U.S. markets were closed on Monday due to the Labor Day holiday. Bitcoin Statistics Technical Analysis Crypto Equities U.S. markets were closed on Monday due to the Labor Day holiday. Crypto Treasury Companies ETF Flows Spot BTC ETFs Spot ETH ETFs Source: Farside Investors Chart of the Day While You Were Sleeping In the Ether