Why the Crypto Market is Going Down? Bitcoin Faces Difficulties While Altcoins Face Challenges

The cryptocurrency market is once again in turmoil as Bitcoin struggles to maintain above $100,000, currently trading at $97,000, while altcoins are experiencing significant decline. The overall market sentiment remains pessimistic, with Ethereum, XRP, Solana, Dogecoin, and Cardano facing a 3-4% correction. What causes Bitcoin to weaken? Bitcoin has shown the ability to recover amidst selling pressure across the market, but has yet to overcome the psychological barrier of $100,000. Global economic uncertainties, along with unresolved Bitcoin Reserve plans and slow-moving cryptocurrency regulations, have created an unstable environment. Cautious investors and the attention of major organizations are focused on Bitcoin ETFs, causing altcoins to suffer from a liquidity crisis. CryptexGuy, a cryptocurrency analyst, has drawn parallels between the current market conditions and previous Bitcoin cycles, noting that extreme volatility is always part of the cryptocurrency landscape. Prior to 2019, Bitcoin experienced a sharp 88% decline before skyrocketing to an astonishing 12,000%. The nature of this cycle is repeating once again, albeit with changes in market dynamics. Historical cycles and their impact on Bitcoin and Altcoins 2018-2021: The explosion driven by crisis Between 2018 and 2021, Bitcoin witnessed an 85% correction followed by a near 2000% surge. This increase was driven by the COVID-19 pandemic, leading to an increasing adoption of digital assets. The rise of NFTs and Ethereum's expanding ecosystem played a significant role in driving the altcoin market, making projects such as Solana, Cardano, and meme coins extremely attractive. However, as the world recovers from the pandemic and traditional employment stabilizes, speculative interest in altcoins has gradually waned. 2022-2025: The dominance of organizations and the Bitcoin-First era The current cycle reflects trends in the past but with a shift towards institutional involvement. Bitcoin has seen a significant drop of about 77%, down to $15,000 due to macroeconomic obstacles, including the collapse of FTX and Terra LUNA. However, Bitcoin has since recovered over 600%, reaching a peak of $109,000. Institutional investments, government interest in Bitcoin mining activities, and ETF approval have brought Bitcoin into the spotlight of the financial world. Altcoin: The struggle to gain relevance In previous price cycles, altcoins have experienced strong growth, mainly driven by stories such as DeFi, NFTs, and Ethereum Layer 2 solutions. However, the current context seems unfavorable for many altcoins. The main themes of this cycle are the role of Bitcoin as a reserve asset, the rise of meme coins, and AI-related tokens. Despite the general trend of price reduction, some altcoins still maintain relevance: XRP: Driven by regulatory developments with the SEC ONDO & HBAR: Benefiting from relationships with BlackRock and the support of organizations AI Token: Leading the way in the wave of AI application However, most other altcoins are struggling, lacking the fundamental narratives that propelled them before. Will altcoins revive? Technical analysts have different opinions on the fate of altcoins. Titan of Crypto believes that Bitcoin Dominance (BTC.D) is showing a "Gravestone Doji" pattern, a potential sign of altcoin recovery. However, Rekt Capital argues that Bitcoin dominance must reach at least 71% before any altcoin price rally can occur. Furthermore, the emergence of Bitcoin ETF has attracted a large capital flow, continuing to shift liquidity away from altcoins. Unless Bitcoin undergoes a significant correction or Bitcoin dominance reaches its peak, the altcoin season is still uncertain. Conclusion: Bitcoin holds the key The cryptocurrency market is still in a phase of focusing on Bitcoin, with organizations accumulating BTC while leaving altcoins in a state of limbo. If history is any guide, altcoins may eventually witness a revival, but only selected projects with a solid fundamental foundation and real-world use cases are developing strongly. Currently, Bitcoin remains the primary driver of market volatility, and any significant changes in Bitcoin's price action will determine the fate of altcoins. Investors should be cautious and focus on the dominance trend of Bitcoin, regulatory updates, and macroeconomic developments before making any major changes to their investment portfolio.