Institutional money is maintaining short positions worth about $1.38 billion in major cryptocurrencies such as bitcoin (BTC), ether (ETH) and XRP, the data showed. The short positions are seen as hedging and market-neutral trades aimed at defending recent gains and exploiting price gaps between spot and futures, rather than directly betting on a market decline.

According to blockchain media outlet U.Today on Aug. 24 local time, the cryptocurrency market has entered a pause near recent highs after its strongest weekly rally in the past 3 years. Large-scale liquidations continued in the futures market after a short squeeze worth about $4 billion late last week.

In the past 24 hours, 78,395 traders were forcibly liquidated for a total of $339.53 million in the futures market, according to Coinglass data. Liquidations of short positions totalled $181.36 million.

Institutional investors moved differently from retail investors. Liquidity providers built large short positions centered on bitcoin, ether and XRP on the decentralized derivatives platform Hyperliquid. Abraxas Capital Management is maintaining a short portfolio worth $783 million. At the same time, it increased its spot exposure by withdrawing 73,000 ETH, worth about $173 million, from Binance.

Wintermute is running short positions worth $190.8 million. Ether accounts for $53 million, bitcoin for $30.7 million and Solana for $22.6 million. Including Pasanara Capital's positions, total institutional shorts amount to about $1.38 billion.

Analysts say it is hard to interpret this simply as institutional pessimism about the market. Evgeny Gaevoy (에브게니 가에보이), Wintermute founder and CEO, explained that large market makers' short positions are trades for neutral inventory management and premium collection.

They are securing profits while reducing exposure to price direction through so-called basis trades, which involve selling perpetual futures while buying spot, the analysis said.

Retail investors, meanwhile, increased losses by betting against the recent upward move. In the past 24 hours, ether saw the largest liquidations at $117.09 million, followed by bitcoin at $72.59 million and XRP at $20.9 million. Zcash also saw $12.13 million worth of positions liquidated.

Market funds are shifting not only into cryptocurrencies but also into gold. Gold prices rose 1.24 percent in a day to approach $4,660 and hit an August high of $4,659.85. A plan to deploy about $950 billion in the U.S. Treasury General Account into long-term Treasury purchases was cited as a factor that could affect market liquidity.

Concerns about U.S. debt are also growing. Ray Dalio (레이 달리오), Bridgewater founder, recommended that investors reduce their holdings of U.S. Treasuries and move assets into gold. He warned that if the current policy direction does not change, a full-blown U.S. debt crisis could occur within the next 3 years, or around 2 years within a margin of error. He also cited bitcoin, along with gold, as an alternative asset that could hedge sovereign risk.

This mood is also showing up in institutional fund flows. Fidelity International has doubled its long gold position over the past 3 weeks. At the same time, weekly net inflows into U.S. spot bitcoin ETFs also reached $1.5 billion, the highest in 10 months, by Sosovalue estimates.

Cash waiting to buy bitcoin is also increasing. Strategy has secured $1.59 billion in cash for future bitcoin purchases, and BitMine holds 4.8 percent of ether market supply and is staking 87 percent of that.

Signs of broader fund dispersion also emerged within the crypto market. The Solana ecosystem processed a weekly record of 1.318 billion transactions, and real-world usage of stablecoins via debit cards reached $1 billion a day. Zcash rose 22 percent after Grayscale updated its filing for the first U.S. spot ETF for a privacy cryptocurrency, approaching its 2018 high of $855.

Bitcoin is currently absorbing selling by large investors around $78,143. With inflows via spot ETFs and institutions' hedging trades continuing at the same time, a key variable for the market ahead will be how retail leverage liquidations and institutions' neutral risk management affect price volatility.