Crypto market shows signs of weakness: Bitcoin's fluctuations put ETH, SOL, and other mainstream tokens at risk of pullback.

Recently, Bitcoin's price has been fluctuating and consolidating, with several major altcoins rising during Bitcoin's consolidation process. However, as signs of fatigue appear in the market, it may face pullback pressure in the short term. Ethereum, Solana, and XRP have seen significant rises recently, and market sentiment is diverging, with some analysts believing that adjustments may occur in the short term. Nevertheless, the overall trend of the market remains optimistic, especially with the potential for the U.S. Federal Reserve to cut interest rates and the correlation between Bitcoin and the global Money Supply, indicating a continued upward potential overall.

Bitcoin is consolidating, providing breathing room for altcoins

Bitcoin is currently consolidating in a narrow range between $117,000 and $120,000 after a strong rebound, entering a temporary consolidation period. In contrast, several major alts have seen inflows during Bitcoin's fluctuations, showing impressive performance. Ethereum has risen 24% since its low on July 15, Solana is up 20%, and XRP has increased by 12%.

Capital Rotation: Bitcoin Steadily Consolidating, Alts Strong in the Short Term

This market pattern is not unfamiliar - whenever Bitcoin consolidates steadily, funds often rotate to mainstream alts, pushing them to outperform the market in the short term. Analysts point out that despite the recent strong performance of these alts, due to the significant previous rise, mainstream coins like Ethereum, Solana, and XRP may face pullback risks in the short term.

Ethereum faces selling pressure, a local reversal may occur

CryptoQuant research director Julio Moreno stated that although Ethereum has led this round of rise, recent market data indicates that Ethereum may face a short-term pullback. CoinGlass data shows a large number of sell orders near Ethereum's current price, which may suggest that the market is facing selling pressure. Elfa AI founder Tristan Teo mentioned that the recent "sell order deviation" of Ethereum has increased, hinting at a possible local reversal.

Solana is facing high leverage risks and may experience a strong pullback in the short term

Solana is also facing similar risks, with the number of open contracts reaching an all-time high. Although the price is still 30% away from its recent peak, such a high number of open contracts usually indicates a high leverage risk in the market, which also increases the likelihood of a strong pullback in the short term.

Short-term pullback signs are evident, but the long-term trend remains bullish

Despite the short-term risks of a pullback in the market, the overall trend remains positive. Ryan McMillin, the investment director of Merke Tree Capital, mentioned that with the potential interest rate cuts by the Federal Reserve and the high correlation between Bitcoin and the global M2 Money Supply, there is still upward space in the market. Although the short-term pullback of alts may cause turbulence in the market, it is seen as "noise" and does not affect the long-term rise trend of the market.

Conclusion: Overall, despite the signs of fatigue shown by mainstream altcoins like Ethereum, Solana, and XRP after recent pumps, the macro trend of the market remains positive. Considering Bitcoin's healthy pullback and potential favorable policies, the market may continue to rise in the coming months. Investors should pay attention to short-term pullback opportunities while capitalizing on the long-term bullish rise.