Date: February 2, 2025 | 04:22 AM GMT
The cryptocurrency market has seen a sharp downturn in the last 24 hours, with Bitcoin (BTC) dropping below the $100K mark and Ethereum (ETH) losing 5% of its value. This sudden sell-off has resulted in $532 million in liquidations, according to data from Coinglass.
As a result, major altcoins have also suffered, with XRP (XRP), Stellar (XLM), and Hedera (HBAR) all declining by over 6%.
Source: Coinmarketcap
What’s Behind the Downturn?
A key reason behind this decline can be seen in Bitcoin dominance, which is showing a crucial technical pattern. The BTC dominance 4-hour chart has formed a classic rising wedge pattern since January 13. This pattern has played out with higher highs and lower lows, and on January 30, BTC dominance finally broke below the wedge at 59.40%.
BTC Dominance 4H Chart/Coinsprobe (Source: Tradingview)
After the breakout, BTC dominance initially fell to 58.62% but then rebounded for a retest, which took it back to 59.71% today before settling at 59.64%. This retest of the previous support now acting as resistance seems to have triggered the altcoin correction.
Can Altcoins Recover?
If BTC dominance confirms this rejection and resumes its downtrend, it could signal a quick recovery for altcoins. A confirmed pullback from here would validate the breakdown of the rising wedge, potentially leading to a strong bounceback for XRP, XLM, HBAR, and other altcoins in the coming days.
However, traders should closely monitor BTC dominance. A further decline would signal a shift back towards altcoin strength, but if BTC dominance fails to pull back and instead breaks above this resistance, it could invalidate the bearish wedge pattern. This might indicate market manipulation, leading to continued pressure on altcoins.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
