Key takeaways
- Bitcoin fell below $115,800 support last week, triggering over $1 billion in liquidations and erasing nearly $59 billion from altcoin market value.
- Altcoins outside the top 10 saw huge losses, while the OTHERS index fell 18.7% in ten days, and Ethereum dropped 9.7% over the past week.
- Bitfinex warned that the sell-off reflects a broad exit from risk assets, not a rotation into altcoins, and predicted a period of sideways trading.
- Some analysts, including Alphractal’s Joao Wedson, believe a quiet rotation into altcoins is already underway, citing Bitcoin’s potential entry into a distribution phase.
Bitcoin’s drop below a key support level last week triggered more than $1 billion in forced liquidations and wiped nearly $59 billion off the value of altcoins, slashing hopes for the start of a long-anticipated “altseason,” according to crypto exchange Bitfinex.
Bitcoin fell through the $115,800 level after several failed attempts to hold that range, reaching a low of $112,210 on August 4. The breakdown, described in the report as a shift in market structure, set off widespread liquidations across digital assets and marked one of the biggest crashes of the year.
On August 2, total liquidations across major exchanges topped $1 billion, with $922 million coming from long positions. While Bitcoin and Ethereum accounted for the largest share by volume, smaller altcoins suffered deeper percentage losses, according to the report.
Despite the decline, Bitcoin’s market capitalisation remains above $2.2 trillion, nearly double its 2021 cycle peak. Bitfinex said this reflects Bitcoin’s status as a macro-resilient and institutionally-driven asset, in contrast to the rest of the crypto market, where speculative flows remain highly sensitive to broader risk sentiment.
Meanwhile, Altcoins, particularly those outside the top 10 by market cap, have seen a sharp drawdown in recent days. The OTHERS index, which tracks this segment, fell 18.7% over ten days, erasing recent gains built up during July’s brief rally.
According to Bitfinex, leveraged positions had been built aggressively in the altcoin space prior to the sell-off, and the breakdown in Bitcoin failed to spark the usual rotation into smaller tokens. Instead, capital exited risk assets altogether, with only a handful of tokens posting gains.
The report suggests the market may enter a period of sideways trading unless renewed spot demand or macroeconomic catalysts emerge. With leverage still elevated and risk appetite muted, hopes for an imminent rally in altcoins appear increasingly unlikely.
Some See It Differently
Not all analysts share Bitfinex’s cautious outlook. Joao Wedson, CEO of analytics firm Alphractal, said in a post on social media platform X that a “quiet rotation” is already underway, with capital gradually shifting from Bitcoin into altcoins.
Wedson, who based his view on the Wyckoff Method, believes Bitcoin is entering the final stages of a distribution phase, marked by weakening demand and systematic selling by large holders.
According to his analysis, altcoins are emerging from accumulation zones and beginning a structural markup cycle, even as retail investors remain focused on Bitcoin. He also warned that bullish sentiment in the media may mislead late buyers, just as institutional money rotates out of BTC.
Separately, some analysts and traders have pointed to Bitcoin’s market dominance as a key signal, saying a sustained drop below the 60% mark — with current levels hovering between 61% and 62% — could be what finally opens the door to a long-awaited altcoin season.
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