The Sacromonte neighbourhood is famous for its grottoes, where Gypsies still celebrate nightly with flamenco singing and dancing. It was here where the Gypsies accompanying the troops of the Catholic Monarchs who conquered the city settled. Craftsmen worked with wicker, forging and copper, while artists laid the foundations of flamenco. The Gypsy festivity known as "zambra" was born here, which involves indigenous dancing and singing such as "la mosca" (the fly) and "la cachuca" (the hat).
We recommend visiting at night and (though it's bad manners) spying discreetly through the windows of the cave-like houses. There are also lots of bars that are authentic grottoes as well.
If you interested in a more formal visit, you can go the following day to the Museo del Sacromonte (5€) in Barranco de los Negros (heading up the hill that leads to Venta del Gallo), but, frankly, it's not worth it. Buses 35, 31 and 32.