The timing of the altcoin market’s drop was noteworthy because it corrected as BTC was rallying, which typically does not happen.
So why exactly did altcoins crash?
There are two main reasons why the altcoin market pulled back despite the strength of the dominant cryptocurrency.
First, when the price of Bitcoin rallied to a new record-high, it sucked out most of the volume in the cryptocurrency market. This naturally caused the market to sway towards BTC, contributing to the pullback of altcoins.
Second, Ether (ETH), which often leads the momentum of the altcoin market, fell sharply against Bitcoin.
BTC/USD vs. ETH/BTC (orange) 1-hour candle chart. Source: Tradingview
The combination of these two factors, combined with the uncertainty around Bitcoin at the $50,000 resistance level, has amplified the selling pressure on the altcoin market.
A pseudonymous trader known as “Kaleo” emphasized
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