Altcoins at Risk as Bitcoin Faces $120K Rejection: Market Analysis
bitcoin Price Action Slows After Hitting New All-Time High
bitcoin‘s Recent Price Movements
bitcoin‘s recent trading activity has shown signs of stagnation following its remarkable surge to a record high of $122,838 on July 14. This rapid ascent was fueled by a week of intense trading and substantial capital inflows, allowing BTC to breach several resistance levels in quick succession. However, after reaching this peak, the cryptocurrency experienced a series of volatile fluctuations, resulting in a pullback to around $116,000. Currently, bitcoin is fluctuating within the $117,000 to $118,500 range.
Bearish Predictions from Analysts
Crypto analyst Melikatrader94 has issued a bearish forecast, suggesting that bitcoin could potentially decline to $113,000. This prediction was shared through a technical analysis on the TradingView platform.
Technical Analysis: Quasimodo Level Structure
According to Melikatrader94’s hourly candlestick chart, bitcoin is currently displaying a Quasimodo Level (QML) structure. This pattern is identified by three peaks in a bearish scenario, with the middle peak being the most significant. The analysis indicated that bitcoin‘s entry into the $119,000 to $121,000 range would attract selling pressure, which has indeed occurred.
The swift rejection following the all-time high indicates a shift towards a bearish trend, with momentum now leaning downward. This rejection transpired after a significant price movement that engulfed a previous support level.
The analyst remarked, “BTC’s rejection from the QML zone confirms that bearish sentiment is active.” The bearish outlook remains intact as long as bitcoin trades below the QML zone, with the next crucial support level identified at $113,600. This area may act as a potential bounce point or a zone for short-term consolidation if the price continues to decline. However, a rebound is anticipated around $116,000 before bitcoin potentially drops to $113,600.
Implications for Altcoins Amidst bitcoin‘s Weakness
The anticipated decline of bitcoin to the $113,000 range could have significant repercussions for various altcoins, many of which have recently experienced substantial gains. These altcoins, which typically follow bitcoin‘s trends, are already exhibiting signs of apprehension as bitcoin struggles to sustain its upward trajectory.
Notable Altcoin Movements
Among the noteworthy altcoins, XRP has finally surpassed its eight-year resistance, reaching a new all-time high of $3.65. However, this rally appears to be losing steam, with the token showing early signs of a correction around the $3.45 mark. Meanwhile, ethereum, which also benefited from bitcoin‘s rise to $122,000, climbed above $3,600 for the first time in several months but has since entered a consolidation phase just below $3,500.
Should bitcoin fall below $116,000 in the near future, it may trigger a wave of outflows from altcoins, resulting in increased selling pressure across the market. Conversely, this scenario could pave the way for an altcoin season, where major altcoins outperform bitcoin for a period.
Featured image from Pixabay, chart from TradingView
