Crypto Market Plunges as Bitcoin Drops Below $103,000, Altcoins Fall by Double Digits

On Saturday, the crypto market experienced a significant downturn as Bitcoin and most digital tokens retreated. Bitcoin dropped below $103,000 for the first time in days, while popular tokens like Pepe, Shiba Inu, Pi Network, and Dogwifhat (WIF) plunged by double digits. The primary reason for the crash in altcoins like Pepe, Shiba Inu, Pi Network, and WIF is the substantial resistance Bitcoin encountered at the $105,900 level. After reaching this level on May 12, Bitcoin has remained in a tight range as its volume has slumped. Altcoins often move in tandem with Bitcoin, rallying when Bitcoin's price is rising and falling when it is either dropping or stalling.

However, there are indications that the current Bitcoin price consolidation may be a calm before the storm, with a potential rebound on the horizon. The volume of Bitcoin has continued to move downwards, which is typically a bearish sign. However, in practice, Bitcoin tends to rebound when the volume in the spot and futures market is falling. Additionally, Bitcoin has formed two unique bullish chart patterns that suggest it will push higher in the coming weeks. It has formed a bullish pennant pattern, which has a flagpole-like pattern and a symmetrical triangle. This pattern normally breaks out when the two lines of the triangle are nearing their confluence level. Bitcoin has also slowly formed a cup-and-handle pattern whose upper side is at $108,022. This cup has a depth of about 32%, meaning that the coin will eventually surge to over $140,000. The caveat is that the cup-and-handle pattern takes a long time to form and complete.

Altcoins also crashed due to profit-taking. Most of these coins were up sharply from their April lows. Pi Network price surged by over 300% from its lowest point in April and its highest level last week. Shiba Inu price jumped by over 72%, while Pepe Coin was up by over 189% in the same period. It is common for cryptocurrencies and other assets to pull back after going through a strong rally, especially in a short period of time. This explains why many of these tokens dropped despite no negative headlines about them. The only coin in this list that had a major issue was Pi Network, whose token crashed after the developers unveiled the Pi Network Ventures, a fund that will invest in technology startups using its technology. While a venture fund is a step in the right direction, analysts believe that Pi is a high-risk asset. For one, it is one of the most centralized cryptocurrencies in the industry.

Bitcoin and other altcoin prices also dropped as investors reacted to macroeconomic factors. The most notable one is the latest US credit rating downgrade by Moody’s. In a statement, the company warned that the US finances were moving in the wrong direction. There is also noise on tariffs. While the US reached a truce with China and the UK, it left tariffs in place, meaning that there are still heightened recession risks. Also, there are signs that the Federal Reserve will hold rates for longer as inflation remains at an elevated level.