Here's How to Handle the Crypto Crash | Credit: Veronica Cestari
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Key Takeaways
The crypto market cap has crashed by nearly 5% since yesterday.
Bitcoin (BTC) held up comparatively well, increasing its dominance.
Is the crypto crash a temporary dip, or will it lead to new lows?
The crypto market dropped nearly 5% over the past 24 hours, but technical indicators and wave patterns point to a healthy pullback after an extended rally.
Bitcoin (BTC) held steady, even gaining market dominance, while altcoins posted mixed results.
So, when might the market bounce back to recent highs? Let’s examine the charts.
Why Crypto is Down Today
The crypto market may be in the red today, but technical indicators suggest there’s little reason for alarm.
Since June 22, the market has rallied more than 33% with almost no meaningful pullback. A correction at this stage is not only expected — it’s healthy.
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The sharp rise that followed a breakout from diagonal resistance on July 9 has taken on a parabolic shape. A short-term cooldown could allow for a more sustainable upward trend.
If the market does continue to dip, the previous all-time high region near $3.75 trillion is likely to act as a strong support zone. As long as that level holds, the broader uptrend remains intact.
Momentum indicators and wave patterns are also encouraging.
Crypto Market Cap | Credit: Valdrin Tahiri/TradingView
The current wave structure has been impulsive since April, suggesting the bull trend is still in play, even if it’s unclear exactly where within wave three the market stands.
Meanwhile, the Relative Strength Index (RSI) is pulling back but hasn’t flashed any bearish divergences, a key signal typically seen before a local top.
In short, this downturn appears to be a standard retracement within a larger bullish trend, not a sign of a major reversal.
Bitcoin and Its Dominance
As with every other crypto market movement, Bitcoin and its dominance can provide clues for where the market will head next.
The Bitcoin Dominance rate has bounced for the past three days, following an 8.5% decline, one of the biggest in the current cycle.
Despite the bounce, the Bitcoin Dominance rate trades under the support-turned-resistance at 62.5%, so a bullish trend reversal is unlikely.
Additionally, the RSI fell to 17 before the bounce, so the extremely oversold levels likely caused a temporary reaction.
Bitcoin’s price action suggests the recent correction may already be behind us. The asset is currently trading within a symmetrical triangle, a pattern that likely represents wave four in a five-wave upward structure that began in June.
If this count holds, the next leg up could target the $127,150 to $127,760 range. This zone is derived by projecting wave five to match the length of wave one and aligning it with the 1.61 external Fibonacci retracement of the previous drop.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
