TechFlow news, according to the Bitfinex Alpha report, Bitcoin dropped 10.7% in the first week of September, continuing the downward trend since the end of August and falling below the key support level of $56,711 set on May 1. This sell-off has led to a reduction in leveraged positions, suggesting the market may be approaching a local bottom.
U.S. equity performance, particularly the S&P 500's worst weekly performance since March 2023, was crucial for Bitcoin’s short-term trajectory. The correlation between Bitcoin and traditional financial markets remains evident, with significant outflows from Bitcoin ETFs observed over the past week—net outflows reaching $706.1 million since August 27. In contrast, the small-cap cryptocurrency sector demonstrated resilience. Bitcoin’s market cap share declined by 1.3% last week, while the market capitalization of crypto assets outside the top 10 increased by 4.4%. This shift suggests investors may be seeking value in smaller-cap cryptocurrencies.
However, open interest in small-cap coins also fell 55% from its all-time high, indicating weakening speculative sentiment.
Analysts believe that if Bitcoin dominance has indeed reached a local peak, smaller cryptocurrencies could outperform the broader market over the coming months, potentially laying the foundation for a bullish rally in the fourth quarter.
