Altcoins
Bitcoin seems indecisive as price refuses to rise above $64,500; Here’s how Altcoins are reacting
Bitcoin’s price action has left many in suspense. Despite recent gains, the price has fallen below $65,000. Analyst Miles Deutscher said Bitcoin remains just above the critical $64,000 level on the weekly chart, indicating potential danger. The analyst also highlighted how the current weakness of the altcoin market compared to Bitcoin is a major concern.
He explained that Bitcoin has lost the average level at $66.5k, and another significant level at $64k is also in play. To gain bullish momentum, Bitcoin needs to recapture the $66.5k level to reach the high range around $73,000. Currently, Bitcoin seems undecided, potentially falling. The $64,000 level represents key support; breaking it could lead to a drop to the $60,000 low level.
However, on the flip side, Total 3 (excluding Bitcoin and Ethereum) is above the major support level at 560. This level is seen as a decent buy zone for many altcoins if it lines up with individual altcoin charts. Despite the market downturn, some altcoins present buying opportunities, especially during large liquidation cascades for those with a long-term perspective.
The analyst explains that the relative weakness of altcoins compared to Bitcoin can be traced back to market dynamics starting in 2021. During the 2021 bull run, the cryptocurrency market saw an influx of capital, highlighted by the stablecoin index . This has led to high investment activity, especially from venture capital (VC) firms, who have injected unprecedented amounts of money into the market.
Highlighting the next reason, he said that with the market showing signs of recovery, a wave of new tokens were launched in early 2024. This increased supply, with over 1 million new tokens created since April 2024 , took the market by storm despite increased liquidity from the Bitcoin ETF.
The increase in token supply has diluted the market, causing altcoins to perform poorly. Many major altcoins have struggled to match Bitcoin’s performance, with only a few exceptions managing to outperform Bitcoin following the collapse of FTX.