In brief
- Bitcoin’s consolidation near $120,000 has fueled recent gains in major altcoins, but signs of exhaustion are emerging.
- Analysts flag a buildup of Ethereum sell orders and leveraged positioning in Solana, pointing to a possible short-term correction.
- Despite near-term caution, some remain bullish, citing macro drivers like Fed rate cuts and liquidity trends.
Several leading altcoins that rallied amid Bitcoin’s recent consolidation have stalled, prompting signs of fatigue across the broader market.
But is the sector nearing a pullback, or are current moves just macro tremors ahead of another upward leg?
Bitcoin is trading in a narrow range between $117,000 and $120,000, entering a period of consolidation following a strong rally.
In its wake, major altcoins have surged, with Ethereum up 24%, Solana 20%, and XRP 12% since the July 15 low.
The pattern is familiar: as Bitcoin steadies, capital often rotates into top-tier tokens, driving short-term outperformance.
However, the “significant” rallies in the past few months mean top altcoins such as Ethereum, Solana, and XRP “may see a correction in the short-term," Julio Moreno, head of research at CryptoQuant, told Decrypt.
CoinGlass data shows a spike in Ethereum sell orders within 10% of its current price, suggesting possible selling pressure. The firm notes this negative delta means the "market may be facing selling pressure."
Ethereum has "been leading the rally," but a recent rise in ask skew suggests a "possible local reversal," Tristan Teo, founder of Elfa AI, a platform that tracks real-time social and on-chain behavior, told Decrypt.
Ethereum is taking a “breather” after running “hard,” Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital, told Decrypt.
McMillin cautioned that 500,000 ETH are “queued to unstake” and could “spook” Ethereum’s Exchange Traded Fund inflows.
While Bitcoin's consolidation around $120,000 is considered healthy, McMillin also pointed to the potential for leveraged long liquidations in the short term.
That aligns with Moreno's correction outlook and the short-term exhaustion signs observed in Ethereum's order book.
Solana, meanwhile, exhibits a similar sign of caution; its open interest—the total number of outstanding derivatives contracts, including futures and perpetuals, that have not yet been settled—has hit a record high.
Yet, its price remains roughly 30% away from its peak. A spike of this magnitude often suggests high leverage, reinforcing McMillin’s expectation of short-term leveraged long liquidation.
Despite short-term signals pointing to a potential pullback, the broader trend remains constructive.
Citing the prospect of Federal Reserve rate cuts and Bitcoin’s correlation with global M2 money supply, McMillin said “the next move is likely up,” calling the recent dip in the altcoins market “noise.”