In the past several hours, the bitcoin price slipped below the $4,000 mark from $4,035 to $3,934, recording a 1 percent drop against the U.S. dollar.
Given the fact that it took nearly three weeks for bitcoin to break out of the $3,000 region and reach $4,000, the sudden drop in the price of bitcoin below the $4,000 level initially led traders to reconsider the near-term price trend of the dominant cryptocurrency.
However, as bitcoin fell, many alternative cryptocurrencies and major crypto assets, which have continuously demonstrated fairly large gains against bitcoin in recent weeks, maintained their value fairly well, not following bitcoin’s downside movement.
According to a recognized cryptocurrency technical analyst and trader “The Crypto Dog,” the strength of alternative cryptocurrencies may assist the cryptocurrency market in maintaining its momentum despite the drop of BTC.
Alternative Cryptocurrencies Remaining Strong is Key For Bitcoin
Following the unforeseen decline in the bitcoin price, the trader said that the rest of the cryptocurrency market, which tends to experience intensified movements on the downside when bitcoin falls, did not record a large drop in price.
BTC is ‘neccing’ but alternative cryptocurrency ratio pairs are going up… what does this mean? This isn’t ordinary price action.
I don’t know exactly what is going to happen (of course I don’t, I’m not a wizard), but this doesn’t seem like a typical dump at all. Yes – everything certainly could collapse into fire in the next hour, but my gut says we go up from here. Alternative cryptocurrencies looking bullish.
Previously, in an interview with CCN.com, a trader known to the community as “Satoshi, MBA” said that the momentum of alternative cryptocurrencies prevented bitcoin from dropping to the lower $3,000 region.
Considering the tendency of alternative cryptocurrencies to follow the price trend of bitcoin, traders have said in recent weeks that if bitcoin falls below $4,000, the cryptocurrency market may experience a slight retrace.
But, despite the inability of bitcoin to cleanly break out of the $4,000 level, the cryptocurrency market has remained relatively stable.
“Most coins have very bullish set ups right now, virtually all of them sitting on annual support. When BTC moves sideways, liquidity will move into alts. Recently we’ve seen huge moves, 40%, 80%, even 150% overnight gains by some alternative cryptocurrencies,” Satoshi, MBA previously told CCN.com.
Speaking to CCN.com, The Crypto Dog echoed a similar sentiment, adding that even if bitcoin drops to $3,500, if alternative cryptocurrencies continue to demonstrate significant strength, the market will be in a good position to recover.
Biggest Losers of the Day
While many tokens recorded solid gains in the range of 3 to 20 percent in the past 24 hours, a handful of crypto assets that have performed strongly throughout March retraced.
Polymath dropped 11 percent against the U.S. dollar and Ontology recorded an 8 percent loss in value following a strong month against both bitcoin and the U.S. dollar.
Ontology, for instance, increased from $0.814 to $1.16 even with today’s drop in price, demonstrating a 42.5 percent increase in price within a three-week span.
Hence, although the drop in the price of bitcoin did cause crypto assets to retrace slightly, the fact that alternative cryptocurrencies have seen minimal impact from the short-term slip of bitcoin may suggest that the sentiment of investors in the market has improved.
Click here for a real-time bitcoin price chart.
Last modified: March 4, 2021 4:10 PM