Bitcoin’s recent price movement was nowhere near as interesting, as the massive blead that happened to other currencies.
Why did we witness a drop in altcoins? What does that mean for the market? Let’s begin.
BITCOIN
BTC lost the $26 500 level and that resulted an over 4% drop. The chart has been updated with new levels. It is important to update the chart after a notable move to either side.
The price bounced little above the line of the parallel channel and at the same level as the last bottom, thus creating a double bottom. This scenario can be interpret like the double top but reversed. When there is a double top formed, it is a sign of weakness and momentum slowing down.
The reversal move can be set in motion after a clear upside move above $26 000 with a confirmed candle close. BTC not being able to push through is a signal for weakness building up. It is not healthy for the overall market to see the price fluctuate at local bottom levels.
A new support has formed between $25 700 – $25 300. It does not hold many buying orders but it is still considered a valid area for the lower time frame. After the move down, new selling orders have appeared between $26 000 – $26 500. Although they are not major, with the current buying volume it is unlikely to see BTC above $26 500.
BITCOIN DOMINANCE
The reason for the great bleed of altcoins can be read through the BTC Dominance indicator. In a time of BTC going down we can clearly see that the dominance increased. What does that mean?
In the scenario, where the BTC Dominance increased and BTC goes down, creates the biggest drops for the other currencies. We saw a flow of the crypto funds from riskier coins to the biggest one out there.
Investors tend to gravitate towards safer and more established cryptocurrencies like BTC during periods of market uncertainty or negative sentiment. This preference for lower-risk assets leads to a higher BTC dominance and a sell-off of riskier altcoins.
The indicator has formed an upper parallel channel on the Daily chart. They tend to break do the downside and this is a bearish pattern that is yet to unfold. This can be interpreted as: we will see a relief in the altcoins’ prices when the dominance goes lower. Will keep monitoring the outcome, as it is one indicator to look out for currently.
SOLANA
The SOL price was a victim of over 32% loss in a matter of 48 hours. In its current prices it has been reduced and has made some recovery.
New Short-Term Support zone is valid between $14.90 – $14.30. It is vital to mention that in between the next support and resistance there are little orders. This is a sign that the coin can move freely because there are no major levels to resist it. Ultimately, this is a sign of future volatility in the price until we see more orders appear.
The next resistance is situated from $17.37 to $17.80. Looking to see SOL move between the most recent support and resistance levels, as we are already in the weekend. Weekend moves should not set overall market sentiment because they tend to retrace in the upcoming week.
