Investors are putting on the brakes as Bitcoin shows some serious weakness and altcoin traders are waving the white flag.

According to the latest Bitfinex Alpha report, Bitcoin slipped below its three-week range floor at $115,800 late last week. By August 5, it had dropped further to $112,722.10, flipping what used to be support into potential resistance.

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BTC price. Source: TradingView

This breakdown follows a period of weakening order flow and open interest. Traders had rotated into Ethereum (ETH) and higher-beta assets, but that quickly went south. Between July 28 and August 2, altcoins outside the top 10 lost 16.3%, wiping out a cool $40 billion in value before a minor bounce.

So, what's really going on here? It seems like a full-on market-wide de-risking, not just a shift in leadership. Bitcoin is down 6.6% from its all-time high of $123,054, and Ethereum is off 9% from its peak, closing last week 9.7% lower. Even altcoins, which had a slight pump to nearly $994 billion at the start of the week, couldn’t hold onto the gains.

Surprisingly, a couple of altcoins bucked the trend. ENA and PENGU saw some solid weekly gains of 14% and 8.4%, respectively. But before you get excited, both of them are bleeding this week, ENA’s down 4.1% and PENGU’s taking a 7.6% hit.

Liquidation Chaos and Market Reset

Leverage didn’t do anyone any favors. On August 2, liquidations across major centralized exchanges topped $1 billion, with more than $922 million in long positions wiped out. Yikes!

Ethereum long liquidations made up most of the pain, with traders trying to catch up after ETH lagged earlier. But here's the kicker: the report calls this a "cleansing" event. In other words, the market’s trying to hit the reset button. Still, it’s not out of the woods yet. The market is fragile, and sharp reversals could be lurking around the corner.

On the flip side, Bitcoin is still holding its own. Its market cap is above $2.2 trillion – nearly double its 2021 peak. Meanwhile, Ethereum and the altcoin market haven’t even managed to surpass their 2021 highs.

This shows that Bitcoin is becoming a more macro-resilient, institutional-grade asset, while the altcoin sector still struggles with capital rotation and lack of demand.

Despite last week's hiccups, Bitcoin’s bouncing back, recovering the $114,000 mark after briefly dipping below it. But without aggressive spot buying, fresh ETF inflows, or any relief from the Federal Reserve, the future looks uncertain. Don’t hold your breath for a massive rally just yet. Stay tuned; things are getting wild!

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