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The aggregated crypto market has been caught within a firm uptrend throughout 2020, with all pullbacks being fleeting and followed by further upside. This momentum has largely stemmed from Bitcoin’s recent bullishness, and in the near-term BTC will likely continue to offer guidance to the markets.
Last night, Bitcoin faced a somewhat intense rejection at $10,200, which caused the crypto to lose its recently established position within the five-figure price region thus leading the entire market to see a selloff.
This selloff, however, may be weaker than it seems, as a technical pattern seen while looking at the aggregated crypto market capitalization seems to point to the possibility that bulls will soon once again gain firm control over the market.
Crypto Market Stops Short of a Key Threshold Before Selling Off; Here’s Why That’s Bullish
While looking towards the total crypto market cap, it appears that it stopped just short of surpassing $290 billion, which analysts were noting appeared to be a resistance level for the market.
Importantly, the market was not rejected at this level, but rather just failed to reach it, which reduces the bearishness of this latest downwards movement.
Mr. Anderson, a well-respected crypto analyst on Twitter, explained in a recent tweet that he isn’t worried about the state of the market-wide uptrend yet, as he prefers to see rallies stop short of resistance rather than tap them and get rejected.
“TOTAL update: As discussed, $290 billion was an expected fight. I prefer them to stop just short like this vs a failed reclaim which can add strength to the resistance. No worries just yet,” he explained.
$TOTAL update
As discussed,$290 billion was an expected fight
I prefer them to stop just short like this vs a Failed reclaim which can add strength to the resistance
No worries just yet. pic.twitter.com/AH11o2gxpe
— Mr. Anderson (@TrueCrypto28) February 10, 2020
Does Bitcoin’s Price Action Spell Trouble for the Market?
It is important to note that Bitcoin, which is in firm control over most other major cryptocurrencies, is currently in the process of posting a bearish engulfing candle on both its 12-hour and daily chart.
This technical pattern, if confirmed on both time frames, could suggest that its recent highs of $10,200 are a mid-term top, and that a deeper pullback is imminent.
“Bitcoin 12 hour – Bear engulfing – Daily chart working on one too,” Big Cheds, a prominent analyst, explained.
$BTC #Bitcoin 12 hour – Bear engulfing –
Daily chart working on one too pic.twitter.com/ZSYcDDesnm
— Cheds (Trading Quotes) (@BigCheds) February 10, 2020
If Bitcoin does start to retrace further, it is highly probable that altcoins will move in tandem, thus leading the aggregated crypto market capitalization to plummet, potentially invalidating the bullish market structure that has been developed throughout 2020.
Featured image from Shutterstock.
