Bitcoin Rises but Risks Surge as Traders Flock to Altcoins
Over the past few weeks, we've seen a noticeable shift in the crypto markets, and it’s not just about prices moving up or down. What’s been happening is a kind of quiet storm building beneath the surface—one that could impact how the next few weeks play out. Let’s talk about it.
So, Bitcoin has recently bounced off a low near $114,800 and closed the previous week up about 2.1%, landing around $119,580. On the surface, that sounds pretty solid, right? But behind that price recovery lies a different story. According to the latest report from Bitfinex Alpha, the rise in Bitcoin price has been fueled in part by increasing leverage in the derivatives markets. In simple terms, traders are borrowing more money to place bigger bets, which introduces a lot more risk into the system.
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Just between July 23 and 24 , over $1.1 billion in leveraged long positions were liquidated across major exchanges. To put that into perspective, the daily average for liquidations over the past month has been about $350 million. A drop of just 5% in Bitcoin’s price over three days triggered nearly $1.46 billion in long liquidations , including $370 million linked directly to Bitcoin. That’s massive, and it signals how fragile the market has become when leverage piles up too quickly.
The market’s structure is clearly shifting. Bitcoin’s share of open interest (OI) —which basically measures how much money is tied up in active derivatives contracts—has dropped from 51% to 41% in the last three months. At the same time, Ethereum’s OI share has jumped from 17% to 26% , driven in part by speculation around ETFs and rising institutional interest. Altcoins like Solana, XRP, and Dogecoin are also gaining steam, with the total open interest in top altcoins surging from $26 billion to $44 billion just in July.
This rotation of capital from Bitcoin into altcoins reflects growing risk appetite , but it’s also creating a more unstable environment. Why? Because many of these altcoins are high-beta assets —they’re more volatile, and when they move, they move fast. If prices drop, the domino effect of leveraged positions being liquidated can be severe.
So while Bitcoin’s current support at $114,800 seems to be holding for now, traders are being cautioned. The system is becoming more fragile. It’s being suggested that careful attention be paid to leverage indicators, funding rates, and position sizes. If leverage cools down a bit, this bounce might have legs. But if excessive speculation continues, we could be headed for more sharp corrections.
Bottom line: the crypto market may be showing strength on the surface, but under the hood, risk is quietly building.
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