- Bitcoin’s fall below $59,000 triggered a significant market liquidation, particularly affecting altcoins.
- Analysts advise caution and suggest a pause in altcoin accumulation due to current market uncertainty and weak signals.
In a dramatic 24-hour period, the global cryptocurrency market witnessed a sharp plunge of 4.7% driven by a significant drop in Bitcoin. [BTC] the price, which fell below the critical level of $59,000.
This drop hit the market and hit altcoins hard.
As Bitcoin struggles to maintain its position, the altcoin sector has seen a substantial reduction in market capitalization from $1.03 trillion earlier this month to just $953 billion at press time.
Bitcoin’s recent drop below $59,000 marks a critical moment in the cryptocurrency market, reflecting broader uncertainty and triggering a widespread selloff.
The downtrend has cast doubt on the continued health of the bull market, with Bitcoin testing support levels several times – an indicator of potential market weakness.
On Crypto Banter’s “The Ran Show”, analysts highlighted bitcoin’s uncertain position at the bottom of its trading range, suggesting that a retest of these levels may signal an imminent market move.
Avoid altcoins
During these turbulent market conditions, experts advise traders to be cautious, especially with altcoins.
Recent patterns and market data suggest a cooling period for altcoins that have been heavily impacted by long-term Bitcoin price adjustments.
An analyst at Crypto Banter noted that while altcoins typically have periods of recovery, current market conditions are not conducive to an immediate recovery.
Using the Pendulum [PENDLE] as an example, an analyst revealed that an altcoin experienced a significant decline not due to protocol issues, but due to external market pressures, illustrating the volatile nature of altcoin investments in uncertain times.
The analyst’s advice is to focus on robust data in the chain and not get swayed by passing social media trends.
Analyst Crypto Banter also mentioned a recent move by FTX that could potentially return more funds to users than they initially lost, suggesting a positive turn in market liquidity that could support a recovery.
Comparing bitcoin’s market capitalization growth to major financial institutions and traditional assets like gold, the analyst boosted bitcoin’s long-term value despite short-term volatility.
Solana: A case study in volatility
While the analyst advised caution on altcoins, it makes sense to examine Solana [SOL]the third largest altcoin in the market, as a specific case of the impact of the market downturn on altcoins.
Solana was heavily influenced; in the last 24 hours alone, the price of SOL has decreased by 7.3% and was trading at $134.83 at press time. This decline followed a brief sharp increase enthusiasm about potential ETFs.
This decline in the value of Solana had a significant impact on traders. According to Coinglassin the last day, 106,449 traders faced liquidations totaling $289.26 million.
Of that, Solana-related liquidations accounted for approximately $12.55 million, mostly from long positions. Specifically, Solano’s long liquidations totaled $10.76 million, compared to $1.80 million of short positions.
Source: Coinglass
Read bitcoins [BTC] Price Prediction 2024-25
The drop appears to affect Solano’s activity in the chain. AMBCrypto view Solscan indicated a significant decrease in the number of active addresses.
From more than 1.2 million addresses last month, the number was down to 882,000 at press time, indicating waning user engagement under current market conditions.
Source: Solscan