Bitcoin’s recent flash crash has turned heads in the crypto world, as market observers speculate it could herald the much-anticipated altcoin season. The leading cryptocurrency, which had surged following Federal Reserve Chair Jerome Powell’s dovish remarks last week, has now retraced to its pre-surge levels, taking a toll on altcoins and halting ether’s rally. As of late Monday, the CoinDesk 20 Index dipped by 3% in the past 24 hours, with the broader CoinDesk 80 Index down 3.74%.
Liquidity Shift Sparks Altcoin Buzz
According to Alex Kuptsikevich, senior analyst at FxPro, liquidity is shifting from Bitcoin to altcoins like Ethereum and Solana. “Bitcoin has dropped to $112,000, its weakest since early July,” Kuptsikevich noted in an email, adding that fresh sellers have pushed BTC below its 50-day moving average. This migration of liquidity suggests an impending ‘sell-on-rise’ phase for Bitcoin that could soon extend to altcoins.
Blockchain analytics firm Lookonchain revealed that a major Bitcoin whale recently began diversifying into ether, adding fuel to the emerging altcoin narrative. This aligns with recent reports of Bitcoin Whale Dumps $75 Million to Go Long on Ethereum, highlighting a growing trend among large holders. Meanwhile, Singapore-based QCP Capital maintains an optimistic view on Bitcoin despite the short-term momentum shift to ether. “We expect institutions to continue buying dips selectively,” they stated, emphasizing institutional interest in Bitcoin as a long-term play.
Institutional Moves and Market Dynamics
The weekend’s developments also saw Tokyo-listed Metaplanet increasing its Bitcoin holdings by 103 BTC, boosting its total to 18,991 BTC. This comes alongside Japan’s Finance Minister endorsing regulated crypto assets for portfolio diversification, signaling growing institutional confidence.
On the derivatives front, Hyperliquid—a perpetual futures platform—reported a new 24-hour spot volume record of $3.4 billion, largely driven by increased BTC and ETH deposits. This surge underscores the rising traction of blockchain-based trading ecosystems. Hyperliquid now ranks as the second-largest venue for spot BTC trading across centralized and decentralized exchanges, with $1.5 billion in 24-hour BTC volume alone.
In traditional markets, the U.S. Dollar Index (DXY) saw a modest rise, while gold prices remained stable. However, European stocks and S&P 500 futures edged lower, reflecting cautious investor sentiment.
What Comes Next?
As Bitcoin dominance hovers at 58.21%, the market’s direction remains uncertain. Analysts are watching closely to see if Bitcoin’s current ‘sell-on-rise’ phase will indeed fuel an altcoin season, or if it’s a temporary market blip.
Meanwhile, Ethereum’s market dynamics provide a contrasting picture. Open interest in ether options hit a new high, suggesting continued investor interest despite recent price pullbacks. CME’s ether options open interest notched a record high above $1 billion, driven by large holders in the futures market. This trend is further supported by Old Bitcoin Whale Diverts Capital to Ethereum Amid Rising Interest, indicating a significant shift in market sentiment.
Bitcoin’s recent movements have sparked considerable interest in the options market, where puts are now commanding a premium over calls, hinting at trader caution. On Deribit, BTC options continue to show a bias for puts extending into December, despite the post-Powell bullish sentiment.
The crypto community is abuzz with anticipation, watching whether altcoins can sustain the momentum and capitalize on Bitcoin’s current trajectory. The unfolding scenario raises questions about the longevity and depth of this potential altcoin season, with many traders eyeing the next moves from institutional players and market whales.
As the crypto market navigates this volatile landscape, all eyes remain on the evolving interplay between Bitcoin, altcoins, and broader macroeconomic trends, with the potential for unexpected twists and turns in this ever-dynamic sector.
Source
This article is based on: Here Is Why Bitcoin’s Flash Crash May Signal Altcoin Season: Crypto Daybook Americas
Further Reading
Deepen your understanding with these related articles:
- Ether, Solana, BNB Outshine Bitcoin as Cryptos Rebound
- Altseason Things: Ethereum Perps Volume Sets New Record Against Bitcoin
- Crypto Markets Today: Bitcoin Dominance Slip While Hyperliquid’s Volume Soars to $3.4B
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
