A minor 2.2% price drop in Bitcoin over the past 24 hours has triggered a significant 7.5% decline in total open interest on exchanges.

In contrast, Ethereum and Solana’s open interest has remained relatively stable. This disparity suggests a few key takeaways:

Traders are shifting their focus towards altcoins like ETH and SOL, which have shown strong recovery since the August 5th crash. This increased interest may be driven by a desire for higher returns and diversification.

The reduction in Bitcoin open interest could indicate traders are reducing their exposure due to uncertainty. However, the lack of decline in ETH and SOL open interest suggests they are less sensitive to Bitcoin’s price fluctuations this month.

Altcoins Might Receive Capital Inflow From Traders

The drop in Bitcoin open interest may signal a rotation of capital from Bitcoin to altcoins, as large traders seek to diversify risk and capture higher returns.

Market sentiment indicates traders may be anticipating the end of the August rebound and attempting to sell at the top. However, historically, periods of calm market structure are short-lived and often precede heightened volatility.

Notably, the TD Sequential presents a buy signal on the Bitcoin 4-hour chart, anticipating a price rebound. If Bitcoin closes above $65,440, the next local top could be around $86,910.

Additionally, Bitcoin spot ETFs saw a total net inflow of $203 million on August 26, with BlackRock ETF IBIT experiencing a significant net inflow of $224 million per day.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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