The correlation between Bitcoin and the price movements of altcoins is a two-edged sword that demands careful consideration from most investors during bear markets. Given the highly speculative nature of the altcoin market, it is influenced by its own fundamental factors but also significantly influenced by the four-year Bitcoin cycle.
Furthermore, Bitcoin plays a pivotal role in providing liquidity to the altcoin market, particularly in regions where the cryptocurrency market is not well-received.
Potential Impact of a Bitcoin Flash Crash
Jason Pizzino, a prominent crypto analyst believes that another flash crash in Bitcoin’s price could potentially drive many altcoins below their lower support levels from 2022/2023 when denominated in United States dollars. The analyst contends that such an occurrence might lead to a significant decrease in the value of altcoins relative to their Bitcoin pairs over the subsequent weeks.
Bitcoin’s Price Action and Dominance
In terms of price action, Bitcoin is currently facing considerable selling pressure following the occurrence of a daily death cross between the 50 and 200 Moving Averages (MA). However, Captain Faibik, a renowned crypto analyst, believes that Bitcoin’s dominance is on the verge of surging after several weeks of consolidation. It’s important to note that an increase in Bitcoin dominance doesn’t necessarily translate to a price rally; instead, it could signify a decrease in the market share of altcoins.
At present, Bitcoin is in the process of retesting a critical support level of around $25.7k, which could potentially lead to a substantial price rally in the near future. However, if Bitcoin’s price closes below this pivotal support level in the coming days, there is a likelihood that the leading cryptocurrency may decline towards the $24k mark.
