When Bitcoin nearly hit an all-time high of $ 50,000, the altcoin market crashed.
After the price of Bitcoin (BTC) hit an all-time high of $ 49,000, Altcoins plunged on February 14.
The timing of the altcoin market crash is worth noting because it happens when BTC is rising, which it usually doesn't.
What was the real reason why altcoins crashed?
Although the market-leading cryptocurrency is strong, the altcoin market has fallen for two main reasons.
First, when the price of Bitcoin rose to a new high, it absorbed most of the trading volume in the cryptocurrency market. This naturally caused the market to switch primarily to BTC, causing altcoins to crash.
Second, Ether (ETH), which tends to lead the momentum of the altcoin market, fell sharply against Bitcoin.
The combination of these two factors, coupled with Bitcoin's uncertainty around the $ 50,000 resistance level, has increased the selling pressure in the altcoin market.
A pseudonymous trader named "Kaleo" emphasized that predicting Bitcoin's rise to $ 50,000 can be simple.
However, whether BTC will exceed $ 50,000 remains an important question, which will determine the direction of the short-term price cycle of the cryptocurrency market. Kaleo Said: '' It is very easy to find a move below $ 50,000. The real question is what will happen now. I prefer short term consolidation and range breakouts, but I'm not sure. How long will it take? Will it be rejected? I do not know"
In theory, if Bitcoin consolidates first before breaking above $ 50,000, then this trend may benefit altcoins in the near future.
In Bitcoin's uptrend, as BTC enters the consolidation phase after the first round of rally, altcoins tend to rise. However, when BTC rises or experiences a slight correction, altcoins generally see a sharp drop in the price of BTC and the US dollar.
Bitcoin is currently trending upward, which benefits altcoins
Bitcoin is currently maintaining its bull market structure, which will alleviate some of the selling pressure in the altcoin market for the foreseeable future.
Cryptocurrency trader and analyst Scott Melker stated that Bitcoin continues to emit bullish signals.
In technical analysis, the bullish sign is a kind of market structure, which will take place when the assets merge within a certain range and are marked as a breakthrough.
As long as Bitcoin respects the recently established $ 48,200 support area and consolidates between $ 48,200 and $ 49,700, another advance is highly likely.
