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Crypto market gains 17.6% – Why $421B perp volume raises a red flag
Binance’s monthly report suggests the crypto rally is off to a good start.
From a technical standpoint, the total crypto market cap grew by 17.6% to $2.70 trillion, with <a href="https://xpertsstudio.com/bitcoin-ethereum-and-xrp-price-predictions-today-why-is-crypto-falling/” title=”Bitcoin, Ethereum and XRP Price Predictions Today: Why Is Crypto Falling?”>Bitcoin’s [$BTC] price climbing by 24.8% during the last seven days, marking one of the best weekly rallies since 2020.
But one crucial change stands out. As the chart below highlights, equity holders increased their crypto allocations from 64% to 72%, while also decreasing their allocations to stablecoins by 22%. At the same time, a TradFi-perps share of trading volumes decreased from 40% to 20%, while crypto perpetual volume jumped to $421 billion in the week ending the 23rd of August.
This suggests that investors are adding cash to crypto as opposed to de-leveraging stablecoins. The key takeaway? Investors are not rotating out of equities but buying crypto in addition to their equity holdings.
Notably, the same pattern can be seen in derivatives. Weekend TradFi-perps volume jumped from $5 billion in January to $53 billion in August, indicating the growing demand for 24/7 trading. In fact, the weekend volume averaged at 17.1% of the weekday levels, but reached 40% during major market-moving weekends.
In essence, traders are increasingly taking advantage of crypto derivatives to speculate when traditional markets are closed. But does this mean September has gotten off to a speculative start? Binance’s report suggests the August rally may not be sustainable. So, with TradFi-perps volume moving on-chain, the key question is whether this reflects greater market engagement or growing speculative risk.
Binance’s September report highlights key risks for crypto rally
Binance’s monthly report indicates that the crypto rally is enjoying strong institutional and ETF support.
The spot Bitcoin ETFs registered $3.52 billion in inflows, their strongest month since October 2025, while Ether products hit a 2026 record with $824 million in weekly inflows. However, the altcoin rotation is still in question as the Altcoin Season Index is at 37 and the $BTC dominance is at 1. 59.7%.
Notably, this is where Binance gets cautious about the September rally. August’s move was mostly driven by the macro backdrop. The weaker U.S. payrolls and slower wage growth sent Treasury yields lower, which triggered around $2.7 billion in short liquidations and helped $BTC rise 11.5% to $71,834 before it broke above $80k on the 25th of August.
However, the Jackson Hole speech later sent September rate hike odds to around 60% and $BTC sharply pulled back.
This leaves September as a key test for the rally.
The reasoning is straightforward: Payrolls, CPI, the CLARITY Act vote, and the FOMC meeting are all packed into the first half of the month. But with $BTC dominance below 60%, rotational leadership in the alt-asset class yet to be determined, and a rampant speculative frenzy in the derivatives, the rally is at serious risk.
A reversal in the demand from institutions would trigger a rapid correction.
Final Summary
- Bitcoin ETFs saw $3.52 billion in inflows, while investors increased their crypto exposure.
- Altcoin rotation is still weak, while derivatives speculation is rising. If institutional demand slows, crypto could see a sharp correction.
Source: cryptonews.net