After the price of Bitcoin (BTC) achieved a fresh all-time high over $49,000, Altcoins dropped steeply on February 14. The timing of the collapse of the altcoin market was notable as it was corrected as BTC was rallying, which normally does not occur.
According to cointelegraph.com, there are two key explanations why, considering the power of the leading cryptocurrency, the Altcoin market pulled back.
First, it sucked out much of the volume of the cryptocurrency market as the price of Bitcoin rallied to a fresh record high. This naturally caused the market to shift to BTC, which led to the decline in altcoins.
Second, Ether (ETH), which frequently leads the altcoin market, dropped dramatically toward Bitcoin.
The combination of these two reasons, combined with the uncertainty around Bitcoin at the $50,000 resistance range, has intensified the sales pressure on the altcoin industry.
A pseudonymous trader known as “Kaleo” stressed that forecasting Bitcoin’s $50,000 rally was probably straightforward. But if BTC breaks past $50,000 remains an important question that will decide the direction of the near-term price cycle of the crypto market. He said:
“So this move up to just under $50K was incredibly easy to spot. The real question is what happens next. I’m leaning toward brief consolidation and breaking out of the range, but I’m undecided. How long will it take? Does it get rejected? Idk.”
If Bitcoin consolidates first before breaking out of $50,000, potentially, this pattern is expected to favor altcoins in the near future. During the uptrend of Bitcoin, altcoins begin to increase as BTC consolidates after the initial pulse rally. However, when BTC is rallying or having a minor pullback, altcoins also see significant price declines against both BTC and the U.S. dollar.