On Tuesday, the market’s leading cryptocurrency, Bitcoin (BTC), experienced a notable decline, dropping toward the $89,000 mark, its lowest price in seven months, resulting in over $1 billion in liquidations across the crypto market within the past 24 hours.
However, despite this downturn, altcoins have exhibited significant stability when compared to the performance of BTC. Analysts from the Bull Theory have provided insights into why altcoins are holding strong during this period.
This was reflected in negative flows from Coinbase and the manner in which the candlestick patterns formed. Following this structured selling, panic selling ensued as traders who were already facing losses began to exit their positions hastily.
In previous scenarios where BTC has faced downturns, its dominance in the market typically surges as traders flock to Bitcoin for safety. Yet, the current situation is different.
Ethereum (ETH) has lost its 50-week EMA but is making attempts to reclaim it. Throughout this month, BTC and ETH have experienced nearly identical declines, yet ETH has shown quicker recovery patterns.
The analysts highlighted that during previous cycles, whenever Ethereum holds its ground better than Bitcoin during similar downturns, altcoins tend to demonstrate strength as well.
This, according to their analysis, indicates a few key points: altcoins are outperforming BTC, the current pressure feels isolated rather than widespread, and the sell-off lacks broader implications across the market.
As of this writing, Bitcoin has recovered above the $93,000 mark. However, the leading cryptocurrency has erased all of its year-to-date gains, while extending the gap to record levels by 26%.
Featured image from DALL-E, chart from TradingView.com
