Yesterday, however, this metric hit a historically important region, and shortly after the benchmark cryptocurrency’s price began rebounding
Some analysts are now noting that it may be “pullback time” for altcoins, with this potential decline being perpetuated if Bitcoin can smash above $10,000
Ethereum could also play a big role in this, as it has been more closely correlated to Bitcoin than it has been to smaller altcoins
If ETH rallies further, it could further perpetuate any potential altcoin downturn
Bitcoin has been seeing its price action heat up throughout the past few hours. Overnight, bulls were able to propel it from lows of $9,600 to highs of $10,200.
The selling pressure it faced at this level was insurmountable, and its price quickly fell to lows of $9,800.
It is now once again testing $10,000, and investors are all closely watching to see if this level will be broken above anytime soon.
Analysts are now noting that altcoins may start bleeding out as investors siphon their profits into both BTC and ETH.
Bitcoin Dominance Reaches Historically Important Support Level
At the time of writing, Bitcoin is trading up over 2% at its current price of $9,920. This is around where it has been trading at in the time following its overnight rejection at $10,200.
It is important to note that the five-figure threshold remains a heavy resistance level for the cryptocurrency.
If it is unable to surmount this level in the near-term, it could be poised to see some notable downside.
A break above this level, however, could spark an uptrend that crushes the gains seen by altcoins in recent times.
Bitcoin’s dominance also reached a historically important support level, signaling that capital currently in altcoins may start flowing into BTC.
“BTC Dominance… Pullback time on alts?” One analyst questioned while pointing to the below chart.
Image Courtesy of TraderXO. Chart via TradingView.
Analyst: BTC and ETH Likely to Catalyze Large Dips Amongst Altcoins
Another analyst explained that he does anticipate Bitcoin and Ethereum to both cause altcoins to see notable near-term price declines.
“BTC and ETH may be trending for a while. If so, alts are going to give some amazing dips on the BTC pairs. Keep in mind BTC in 2017, 2019 trends had a massive impact and we just broke the 3 year down trend line on yesterday’s close,” he noted.
How Bitcoin and Ethereum trend in the coming few hours should provide significant insight into where the altcoin market will head next.
Featured image from Unplash.
Charts and pricing data via TradingView.