Market turmoil sends Bitcoin towards new tests

Amid the turmoil characterizing the crypto markets, Bitcoin briefly reached $89,000 before settling around $91,080 in today’s quote, recording a 2.09% decrease in the last 24 hours. However, the movement remains uncertain, and traders maintain a defensive stance.

What is holding back Bitcoin’s rise?

The macroeconomic context represents one of the main obstacles. This afternoon, the Federal Reserve will publish the minutes of its most recent meeting, revealing details about the interest rate cuts conducted so far this year. Two members of the committee voted against the latest cut, while the vast majority of the 19 members discouraged further reductions in the cost of money.

Although this communication may provide some positive signals for crypto assets, analysts consider a change in sentiment unlikely, as the market has already priced in expectations of future cuts.

From a technical perspective, Bitcoin has repeatedly tested the psychological threshold of $90,000 but has struggled to maintain it. Short-term investors continue to use these attempts as liquidation opportunities, systematically driving the price down. The lack of trading volume and the bearish stance of American traders make the outlook even more pessimistic. Additionally, concerns remain unresolved regarding MSCI’s delisting decisions and customs sanctions imposed by the Supreme Court.

The challenge of altcoins in times of volatility

Altcoins are in an even more complicated situation. The pursuit of quick profits drives many investors to try to “buy at the bottom and sell at the top,” a strategy that has historically yielded disappointing results. Stories of investors increasing the number of alternative coins to reduce the average cost, only to multiply losses, unfortunately remain common.

According to analyst DaanCrypto, altcoins have experienced only two brief periods of solid performance in the last twelve months: the end of 2024 and the September-October two-month period. During the rest of the time, Bitcoin has dominated bullish scenarios and shown greater resilience during correction phases.

The lesson: adapt at the right time

Although there are exceptions, current industry leaders face considerable difficulties. The big lesson for crypto investors is that a passive accumulation strategy on a diversified altcoin portfolio has not proven reliable in recent years.

Rather than trying to anticipate market movements, investors should observe prevailing momentum and time their purchases accordingly. It is significantly easier to capitalize on an ongoing trend than to try to identify turning points in the cycle. When conditions are unfavorable, staying on the sidelines is a more prudent choice than deploying capital in a downtrend environment.

Selectivity in asset choice and sensitivity to market cycles remain the key ingredients for generating positive returns in the cryptocurrency sector.