The last two weeks have been very turbulent for the cryptocurrency markets, with Bitcoin and many other altcoins that after reaching the new highs of 2020 just a few weeks ago, have come up against an insurmountable resistance that has triggered a strong bearish trend.
Currently, there is a current of thought according to which the crypto market could approach a level of "make or break" which would set the market trend for the coming months.
If the markets continued to plummet due to this global resistance, surpassing a key level which is slightly below their current level, it could trigger an intense general selloff, which would lead to the selloff in particular of Bitcoin and most of the main altcoin.
The cryptocurrency market shows signs of weakness
The strong bearish trend of Bitcoin seen over the past week has had devastating impacts on the cryptocurrency market, leading many of the major altcoins to significantly cut the gains made during their upward trends in 2020.
Bitcoin, which recently set year-highs at $ 10,500, is currently trading at $ 8,600, just above its latest low of $ 8,400. The same dynamics are also observed for the other cryptocurrencies in the sector.
The damage caused by this downward trend has created a greater focus on the crypto market, highlighting how the capitalization of the cryptocurrency market has lost nearly $ 60 billion from its monthly highs of over $ 300 billion.
Markets may soon rise to annual highs or collapse to historic lows
Crypto Michaël, an important cryptocurrency analyst and trader who also uses Bitcoin system, among others, he explained in a recent tweet that the market capitalization is currently approaching its 21-week moving average and the 200-day moving average for both around 230 billion dollars, which represents a key level to defend with ardor.
If the main players in the crypto market are able to defend this threshold, Michaël says that the market could rise to the highs of 2020, reaching 300 billion dollars. A drop below this level, however, could generate a sharp downward movement of up to $ 190 billion.
Taking Bitcoin as an example and often crucial point in the crypto market, it is important to note that this is not the first time that Bitcoin has found itself involved in a similar descending tunnel, following a model that previously led to significant upward trends.
In any case, the way in which the markets will act in the coming days remains decisive. How cryptocurrency quotes will react to the key level theorized by analysts will provide critical insights into where Bitcoin and altcoin will go in trend in the coming weeks and months.