Altseason Odds: Why is Crypto Crashing Today and When New ATHs?

[Ben Graham]

Why is crypto crashing today, again? We all believed that after Fed Chair Jerome Powell greenlit rate cuts at last week’s Jackson Hole meeting, we’d be over this. Apparently not.

The crypto market saw nearly $20 billion in value erased in less than 72 hours, with Bitcoin alone shedding about $10 billion. Analysts say the drop highlights how this cycle remains firmly BTC-led, even as top August altcoins continue to attract speculative flows.

Bitcoin dominance (BTC.D) has fallen to 57%, its weakest level in months, as traders increasingly rotate into high-beta altcoins. Yet, despite BTC’s relative pullback, altcoin market caps also bled lower.

(SOURCE – Glassnode)

Data from TOTAL2 (the market cap excluding BTC) shows declines in tandem, suggesting there is little appetite for true rotational flows. Instead, the entire market has entered a holding pattern; the question is when will altcoins finally hit?

Why is Crypto Crashing Today, Again? Altcoin Open Interest Surges to Record $61.7B

Even as spot flows remain muted, Altcoin Futures Open Interest (OI) surged +$9.2 billion on August 22, reaching a new all-time high of $61.7 billion. According to Glassnode data, alt OI has added nearly $40 billion since March, far outpacing Bitcoin’s OI growth of $30 billion over the same period.

The mechanics resemble an overheated derivatives market where Bitcoin’s pullbacks spark amplified losses across altcoins.

(BlockchainCenter)

Ethereum’s price fell almost 7%, bottoming at $4,313 before stabilizing. At the same time, the Altcoin Season Index dropped from 61 to 56 in one day, reviving memories of earlier correction signals.

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According to DeFi Llama, the total DeFi market TVL sits near $95 billion, down from its 2025 peak.  Leverage is piling on top of falling prices. Funding rates across Binance, OKX, and Bybit have stayed positive, which indicates aggressive long positioning despite weak price action.

CoinGlass shows how lopsided the structure has become:

• Altcoin OI up 18% this week.
• Spot flows are flat. Over three days, $1.1 billion was flushed in liquidations, led by ETH, SOL, and AVAX.

The picture is one of fragility, not strength.

(X)

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One major player is already calling the bottom. Tom Lee of Fundstrat predicted ETH would “bottom in the next few hours,” citing strong risk/reward levels near $4,300.

Backing the call, BitMine Immersion Technologies added 4,871 ETH ($21.3 million), bringing its holdings to 1.72 million ETH worth about $7.5 billion. That cements BitMine’s position as the second-largest ETH treasury after Michael Saylor’s Strategy.

With leverage stretched, Bitcoin dominance slipping, and altcoin OI at records, traders face a pivotal moment. Either rotational flows could kick in to fuel an altseason, or the market risks another leverage flush that drags the entire sector lower. Until then, volatility looks set to remain the norm.

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Key Takeaways

• Why is crypto crashing today, again? All of us believed that after Fed Chair Jerome Powell greenlit rate cuts we were in the clear.
• Tom Lee of Fundstrat predicted ETH would “bottom in the next few hours,” citing strong risk/reward levels near $4,300.

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