The crypto market is showing signs of divergence as Bitcoin pulls back, leading to increased interest in altcoins.
Summary
- Bitcoin is showing signs of a pullback, staying near the $110,000 mark
- Ethereum’s climb to $4,6000 has revived appetite for risk, and altcoins are benefiting
As August draws to a close, crypto markets are starting to diverge. Bitcoin (BTC) is slowly losing momentum, while liquidity is flowing toward Ethereum (ETH). As of August 27, Bitcoin was down 0.7% over the past seven days, while Ethereum rose 8.24%, breaking the $4,633. In this context, several analysts expect that there are signs that altcoins could benefit in the coming weeks.
According to B2 Ventures founder Arthur Azizov, Ethereum’s rise has fuelled the risk appetite across the crypto sector. For instance, Solana (SOL) was up 15% over that week, and altcoin gains will likely continue if Ethereum remains strong.
“Looking forward, the setup primarily depends on ETH. If it eventually breaks $5,000, altcoins could have 20-30% upside in September. If ETH keeps stalling in the $4,400-4,900 range, we could expect sideways trading with only catalyst-driven moves. Ultimately, if ETH drops below $4,400, even strong altcoins like XRP and Solana risk having 10-15% drawdowns,” Arthur Azizov, B2 Ventures.
You might also like: Ethereum price nears all-time high, rally to $5,700 possible?
Bitcoin, Ethereum pull back from recent highs
Both Bitcoin and Ethereum experienced yearly highs in August, with Bitcoin at $124,457 and Ethereum at $4,626. According to Ruslan Lienkha, chief of markets at YouHodler, the recent pullback from these levels is largely a reflection of broader market sentiment.
In particular, U.S. equities recently saw a similar correction from all-time highs during that period. The question remains whether this downturn in equities is just a temporary correction or a more long-term trend.
The key macro catalysts for crypto heading into September remain U.S. inflation, interest rate policy, and labor market data. The interaction of these factors will largely shape overall risk sentiment and, in turn, the trajectory of both traditional and crypto markets,” Ruslan Lienkha, YouHodler
Read more: Tom Lee predicts Ethereum will bottom hours after BitMine snaps up 4,871 ETH
