Figure 6. ETH/USD 4H Chart. Source: Bitfinex)
Losses however, were widespread elsewhere and it is notable that the total Altcoin market cap remained unchanged, further reinforcing the thesis that capital is rotating across the sector, rather than the market seeing fresh inflows. ARB fell 15.6 percent as liquidity thinned, OKB retraced 14.4 percent after a multi-week rally, and XLM 14 percent), UNI 13.6 percent), and SUI 12.6 percent) all corrected sharply. Smaller high-beta names bore the brunt, including KTA 28.5 percent), BIO 28 percent), ZORA 26.8 percent), and MORPHO 25.7 percent). Even popular meme tokens were not spared, with PEPE down 12.4 percent and MOG dropping 21.8 percent, signalling that profit-taking has spread across narratives. In summary, the majors surrendered recent gains, while targeted rotations into mid-caps and sector plays created sharp divergences — producing both standout winners and heavy laggards. We expect the pullback to reach a conclusion relatively soon as we enter September. The Altcoin market seeing sharp rotations is one of the signs however that might result in the majors seeing capital eventually flowing back in, particularly if the overall market declines further from current levels. The market would likely view such a development, as a signal that a bottom is being reached, which would be in line with our end of summer thesis, which is when ETF flows across major asset classes pick up.