Bitcoin (BTC) feels weak and Altcoin traders surrender, so investors’ appetite for risk seems to be weaker.
According to the latest version of Bitfinex Alpha ReportBTC fell below the three-week range floor, nearly $115,800 last weekend. On August 5, BTC tagged early trading hours at $112,722.10, inverting previous support into potential resistance.
The failure weakens the order flow for several weeks and follows an open interest that showed traders turn to Ethereum (ETH) and high betta names. That spin was suddenly unleashed as the total of the top 10 outer altcoins fell 16.3% between July 28th and August 2nd, erasing about $40 billion worth of value before a modest bounce.
Risk-free movement
The synchronous drawdown between the major and long tail points to risky markets rather than simple changes in leadership. BTC is down 6.6% from an all-time high of $123,054. ETH has closed 9% off its recent local peak and 9.7% lower last week.
At the same time, the broader Altcoin complex deteriorated, starting the week to nearly $994 million with a small pump, but slashed profits at press time.
Despite the crash registered last week, ENA and Pengu remained two outliers with price increases of 14% and 8.4% respectively.
However, I also had an outlier bleeding earlier this week. ENA has dropped by 4.1% over the last 24 hours, while Pengu has revised by 7.6%.
The report noted that leverage amplified the correction movement. On August 2nd, liquidation at major centralized venues exceeded $1 billion and momentum halted, sweeping over $922 million long.
The BTC led to pain, but the long liquidation of ETH consisted of most of the rest, evidence that ETH was busy with bets that would catch up with traders after ETH reduced performance early in the cycle.
Additionally, this report characterized Clearing Flash as a “cleansing” event that typically resets open interest and positioning. However, the market warned that a sharp reversal and liquidation cascade remains at a more likely reflexive and vulnerable stage.
Bitcoin remains strong
Structurally, Bitcoin continues to branch out from other cryptos. The market capitalization exceeds $2.2 trillion, almost double the 2021 cycle peak, but ETH and total markets have not yet exceeded the 2021 high.
The report argued that this reflects the evolution of BTC into more macro-resistant institutional grade assets, in contrast to the Altcoin sector, which still lacks sustained capital rotation and durable structural demand.
For now, Bitcoin has recovered a $114,000 threshold after performing a tactical bounce fueled by the terms of sale sold as predicted by the report and immersed it underneath.
However, with evidence of aggressive spot buying, an influx of funds (ETFs) traded on updated exchanges, and still absurd Federal Reserve background, expectations remain around integration or further corrective price measures.