The current market sentiment is primarily driven by institutional and spot buying pressure, leading to a BTC-led recovery; the speed of leverage and sentiment rebound warrants caution.

Author: Claude

Source: Schatong TechFlow

Overview: Over the past week, Bitcoin rapidly rebounded from around $63,000 to near $80,000, peaking at approximately $81,000, while U.S. spot ETFs recorded their strongest weekly net inflows in several months (around $1.9–2.0 billion). Market breadth has improved noticeably, but Bitcoin’s dominance remains within the 59%-60% range, and the Altcoin Season Index stands at 38–49—far below the 75 threshold required to confirm an altcoin season. The current market movement is primarily driven by institutional and spot buying pressure restoring Bitcoin’s leadership; the pace of rising leverage and sentiment warrants caution.

Bitcoin continued its strong momentum this week, rapidly rising from around $63,000 in mid-August to briefly surpass $81,000 before settling into a range between $78,500 and $79,500. This marks the first time since May that Bitcoin has reclaimed the $80,000 level, with a weekly gain of nearly 25%, representing one of the strongest weekly performances in recent years.

The core force driving this rally comes from spot demand. U.S. spot Bitcoin ETFs recorded net inflows of approximately $1.9 to $2 billion over the past week, marking one of the strongest weekly performances since October 2025. BlackRock’s IBIT continued to contribute the largest share, with single-day inflows exceeding $200 million multiple times. Meanwhile, spot Ethereum ETFs also saw significant inflows. Sustained buying pressure from institutional funds through ETF channels has provided substantial price support.

Market breadth has improved, but Bitcoin remains in control.

From a technical breadth perspective, the market structure has indeed shown positive changes. The percentage of the top 100 tokens trading above their 50-day moving average has risen significantly from around 36% a month ago to over 80%. The total market capitalization of altcoins (Total2) increased by approximately $215 billion between August 19 and 22, reclaiming the $1 trillion mark, with some tokens simultaneously regaining their 200-day moving averages.

However, key rotation indicators have not confirmed this movement in tandem. Bitcoin’s market cap dominance remains around 59%-60%, with some data sources even approaching 61%. The Altcoin Season Index latest reading falls between 38 and 49, well below the typical 75 threshold considered indicative of an altcoin season. This means that over the past 90 days, the vast majority of altcoins have still failed to outperform Bitcoin.

In other words, the current market is primarily a recovery phase characterized by Bitcoin leading the upward movement while altcoins follow, rather than a typical altseason structure where capital broadly rotates from Bitcoin to mid- and small-cap assets. Although the ETH/BTC ratio has rebounded somewhat, capital remains clearly concentrated in top-tier assets.

Leverage and sentiment are recovering faster than fundamentals are solidifying.

On the derivatives level, the market rapidly shifted from fear to greed within a short period. The funding rate turned positive, with BTC perpetual contract rates on some exchanges reaching an annualized rate of approximately 10%, causing long positions to begin paying for their holdings. Open interest fluctuated after a wave of short squeezes, and sentiment indicators quickly entered the "greedy" zone.

Be cautious of the combination where prices rise first, followed by increased leverage. Historical data shows that when buying pressure is primarily driven by ETFs and institutional spot traders, while leveraged traders rapidly increase their positions, a negative macroeconomic or liquidity shock can trigger a cascade of liquidations. Currently, there is no clear evidence of large-scale retail capital returning to the market; although discussion热度 on group chats and social media has rebounded, it remains far below the peak levels of the previous bull market.

The altcoin season has not been confirmed; it is advisable to maintain restraint in your trading actions.

Based on current data, the primary drivers of this rally remain institutional spot buying and short covering, rather than a broad return to retail risk appetite. Classic confirmation signals of an altcoin season—such as a sustained decline in Bitcoin’s dominance, the Altcoin Season Index consistently holding above 75, and mid- to small-cap assets consistently outperforming—have not yet materialized.

Under these circumstances, a more prudent approach is:

1. Prioritize top-tier assets with the highest liquidity, such as Bitcoin and Ethereum, which directly benefit from ETF fund inflows.

2. Be selective with altcoins, focusing on those with clear fundamentals that can hold key moving averages during pullbacks, and avoid blindly chasing assets with the highest short-term gains.

3. Strictly control leverage. Current rates and position structures indicate rising long positioning; in the event of a rapid pullback, highly leveraged positions are likely to be the primary victims.

4. Use the performance during the first meaningful pullback as a key observation window: Only when breadth indicators remain elevated during the pullback and leadership begins to wane does it more closely resemble a true rotation phase.

The market has recovered from deeply oversold conditions, and institutional buying is genuinely present. However, it's still too early to conclude that "altcoin season has arrived." Prices can rise quickly, but shifts in capital structure often take longer.

Before retail participation fully returns, maintaining a patient allocation to top-tier assets while leaving room for potential volatility remains a more suitable strategy for this stage.