Altcoins fell sharply on February 14th after the Bitcoin (BTC) price hit a new all-time high above $ 49,000.
The cryptocurrency market’s downturn was noteworthy because it corrected as BTC rose, which is usually not the case.
So why exactly did altcoins crash?
There are two main reasons why the alternative currency market is falling despite the strength of the dominant cryptocurrency.
First, when Bitcoin’s price rose to a new record high, it absorbed most of the volume in the cryptocurrency market. This naturally caused the market to swing towards BTC, which contributed to the decline in altcoins.
Second, ETH, which often drives altcoin market momentum, has fallen sharply against Bitcoin.
The combination of these two factors, combined with the uncertainty around Bitcoin at the $ 50,000 resistance level, amplified selling pressure in the altcoin market.
A trader under a pseudonym “Kaleo” confirmed that expecting Bitcoin to rise to $ 50,000 is arguably simple.
However, whether BTC crosses $ 50,000 remains an important question that will determine the direction of the price cycle in the near term for the crypto market. he is She said:
“So it was very easy to spot this move to just under $ 50K. The real question is what happens next. I tend to short consolidate and go out of range, but I’m hesitating. How long will it take? Will it be rejected? I don’t know.” “
If Bitcoin is first consolidated before exiting $ 50,000, in theory, the trend is likely to benefit digital currencies for the foreseeable future.
During a bitcoin bullish trend, altcoins tend to rally when BTC consolidates after the initial impulse rallies. However, when BTC rises or falls slightly, altcoins often see significant price declines against both BTC and the US dollar.
Bitcoin is bullish at the moment, which is beneficial for changes
For now, Bitcoin maintains its bullish market structure, which should ease some of the selling pressure on the cryptocurrency market for the foreseeable future.
Scott Melker, cryptocurrency trader and analyst, said Bitcoin continues to see streak bull flags.
Bull flags are a market structure in technical analysis that materializes when an asset explodes after consolidation within a range.
This typically demonstrates a staircase-like height that is sustainable in the long term. Melker She said:
“Little Taurus flags everywhere. Finally closed above $ 48,200 after 7 rejections. Holding under resistance usually leads to collapse.”
As long as Bitcoin defends its newly established $ 48,200 support zone and brings in between $ 48,200 and $ 49,700, another breakout is much more likely.
Should Bitcoin see another breakout, the altcoin market will likely rally alongside Bitcoin after it saw an initial decline in its first batch of BTC.