Bitcoin Faces Challenges After Recent Selloff

Bitcoin and other cryptocurrencies experienced a mixed performance on Monday following a significant selloff that occurred last week. This sell-off caused digital assets to plummet through crucial technical levels, potentially leading to further declines.

Over the past 24 hours, the price of Bitcoin has dropped by less than 1% to $26,050. After hitting a low of around $25,500 from $29,000, Bitcoin has stabilized around the $26,000 mark.

Although the market is currently above the previous local lows of June, there are concerns about July's highs being lower than April's. Alex Kuptsikevich, an analyst at broker FxPro, explains that Bitcoin closed the week with a significant drop below its 200-week and 200-day moving averages, indicating a shift towards a bearish trend.

Evaluating the Market

The selloff that impacted Bitcoin signaled a major shift in the crypto markets, which had been experiencing a period of historically stagnant trading. The sudden drop last week surprised many traders and prompted them to search for causes.

With cryptocurrencies lingering below important technical levels, analysts are wary of further declines in the Bitcoin market. Katie Stockton, managing partner at technical research firm Fairlead Strategies, highlights that the decline has pushed Bitcoin below short-term support and its 200-day moving average. This makes the next crucial support level near $25,200 vulnerable. Additionally, secondary support is estimated to be around $20,600.

Other Cryptocurrencies' Performance

Apart from Bitcoin, Ether saw a modest gain of less than 1% and reached $1,675. However, Ether has also experienced similar declines to Bitcoin in recent days. Smaller cryptocurrencies, commonly referred to as altcoins, displayed a mixed performance. Cardano saw a slight increase of less than 1%, whereas Polygon slipped by less than 1%. On the other hand, memecoins showed more significant losses, with Dogecoin down 2% and Shiba Inu shedding 3%.