Altcoins sell-off after Bitcoin price rejects near its $58K all-time high

Optimism continues to permeate the cryptocurrency sector, with recent gains in bitcoin (BTC) helping to boost the valuation of the highest-rated cryptocurrency after the South Korean won.

Data from Cointelegraph Markets and TradingView shows that bitcoin prices saw a wave of selling in the early hours, pushing the price to a low of $54,948, before the bulls came back and briefly pushed the price above $57,000.

4 hour chart BTC/USDT. Source: TradingView

Regardless of bitcoin’s price movements, institutional investors have consistently shown interest in BTC. MicroStrategy announced today that it has purchased an additional 262 BTC at an average price of $57,146, bringing its total assets to 91,326 BTC.

According to David Lifchitz, chief investment officer at ExoAlpha, the price trend over the next few days will reveal whether bitcoin is on its way to new highs or whether a decline is in sight.

Lifshitz noted that the price of BTC fell slightly Friday after being within a few basis points of its all-time high, likely due to profit-taking by those who monetized a 10% rise from $45,000 to $57,000.

Bullish indicators for bitcoin identified by Lifchitz include institutional buyer interest around the $45,000 mark and President Biden’s recent stimulus package, which he believes could directly fuel cryptocurrency purchases.

Lifchitz acknowledged that although the price of bitcoin is in a long-term uptrend, there are reasons for a more bearish outlook in the short term. One factor to consider is the upcoming U.S. tax season, which may prompt some investors to sell some of their holdings to accumulate cash to pay taxes on gains in fiscal 2020.

Another short-term bearish factor identified by Lifchitz is the potential contagion effect that could result from selling traditional assets that are stretched in all respects and could be profitable in the short term.

Overall, Lifchitz concludes:

In the short term, sideways consolidation is possible before a potential breakout to a new ATH if the pullback persists as described above.

Investors pour into non-fungal tokens

Non-redeemable tokens remain a dominant theme in the crypto-currency space after Bipl’s record-breaking NFT auction closed at over $69.3 million on the 11th. March.

Chiliz (CHZ) was the star of the day, with a 24-hour trading volume of $5.55 billion that pushed the fan engagement platform up 82% to a new all-time high of $0.59.

CHZ/USDT card 4 hours. Source: TradingView

Cointelegraph Markets Pro’s VORTECS™ data began on the 10th. In March, before the recent price increase, the outlook for CHZ was clearly positive.

Cointelegraph’s proprietary VORTECS™ assessment is an algorithmic comparison of historical and current market conditions derived from a combination of data including market sentiment, trading volume, recent price movements and Twitter activity.

RankingVORTECS™ (green) versus CHZ price. Source: Coin Markets Pro

As the basket above shows, the VORTECS™ rating has risen from a low of 49 to 8. March to a high of 84 on March 10, about 24 hours before the price rose 175% over the next two days to a new all-time high.

Decentralized finance projects are finally consolidating after significant gains in the first two months of 2021, as leading platforms DEX and DeFi explore options such as blockchain and Layer 2 solutions to offset high transaction costs on the Ethereum (ETH) network.

Polygon (MATIC) and SKALE (SKL) are two Ethereum scaling solutions that outperformed their altcoin counterparts this week, after both tokens were listed on Coinbase on the 9th. The month of March showed a recovery of almost 100%.

Daily indicators for the crypto-currency market. Source : coin360

Overall, the cryptocurrency market was under some pressure over the weekend. The rally is likely the result of bitcoin’s price divergence near its all-time high and not a sign of a trend reversal, yet, most major cryptocurrencies are down 2-10%.

The total capitalization of the cryptocurrency market is currently $1.71 trillion, with bitcoin dominating at 62%.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. You should do your own research before making a decision.

frequently asked questions

What happens to altcoins when bitcoin rises?

During bitcoin’s uptrend, alternative currencies tend to rise as bitcoin consolidates after an initial rally. However, when BTC rises or experiences a small decline, altcoins often experience sharp price declines against BTC and the US dollar.

Will the price of BTC fall after it halves?

This means that the value of bitcoin increases after each snap. Historically, bitcoin experiences a rise after every six months. When supply falls, stimulating demand, the price rises. However, this upward trend is not immediate.

What is the highest price bitcoin has ever reached?

The price of bitcoin reached a new record high of nearly $50,000 as the largest Fortune 500 companies expressed their support for digital currency.

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