Crypto Market in Peril of Seeing Major Downside as Bitcoin Strength Wanes
- The entire crypto market is currently consolidating as buyers and sellers reach an impasse following yesterday’s movement
- It now appears that the market could be positioned to see massive near-term downside due to some warning signs being flashed by Bitcoin
- If the benchmark cryptocurrency does lead the market lower, altcoins could severely underperform it
Bitcoin and the entire crypto market have seen some calmness throughout the past day, struggling to garner any directionality in the time since yesterday’s immense volatility.
This volatility was rooted in Bitcoin’s fleeting rally to highs of $10,400, which was tapped briefly before the crypto incurred some massive selling pressure.
The decline from these highs ultimately led the crypto to lows of $8,600 on BitMEX – sparking a massive amount of liquidations from buyers who had just recently opened positions.
Naturally, this volatility sent shockwaves throughout the entire crypto market, causing altcoins like Ethereum to also cut significantly into their recent gains.
Analysts are now noting that BTC is flashing some signs that it will see even further near-term weakness. This could prove to be dire for many smaller cryptocurrencies.
Bitcoin and the Crypto Market Consolidate; Here’s What Could Come Next
At the time of writing, Bitcoin is trading down just over 5% at its current price of $9,600. This is around the level it was been trading at for the past day, as it has struggled to garner any momentum following yesterday’s volatility.
The decline from its daily highs has led altcoins to also post notable losses.
Currently, Ethereum is trading down 4% against its USD trading pair, while XRP, Bitcoin Cash, and Litecoin are all trading down nearly 5%.
This weakness hasn’t really offered any significant insight into where the market may trend next, but Bitcoin’s inability to break $10,000 does elucidate some underlying weakness.
One analyst believes that this region will be tested once more by the benchmark crypto, potentially providing traders with a prime shorting opportunity.
“BTC: Potential test to the 9.8k-10k S/R level, which should act as resistance. Only looking for shorts there or below 8.5k. Okex showing strong demand at this level.
Here’s How Low Other Traders Think BTC May Decline
The above analyst isn’t the only one offering a gloomy outlook for the benchmark cryptocurrency.
Another popular trader recently offered a chart showing that he has set a downside target within the upper-$7,000 region.
He does note that a flip above the upper-$9,000 region would invalidate his bearish outlook.
“BTC – Getting back to going short. If we can flip this 12 hr s/r lvl then I’ll look at getting long again. Until then, my bias is back to bearish,” he said.
How Bitcoin trends in the hours and days ahead should provide smaller altcoins with clear mid-term trends.
Featured image from Shutterstock.
BTCUSD, XBTUSD, BTCUSDT
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