The crypto market continued its downward trend on Saturday, May 17, with most altcoins erasing some of their recent gains.
Bitcoin (BTC) price dropped from this week’s high of $105,000 to $103,000. Some of the top laggards were Pi Network (PI), Bonk (BONK), Floki (FLOKI), and Pudgy Penguins (PENGU), which dropped by over 10%.
Bitcoin is often the main driver in the crypto market. In most cases, altcoins rally whenever the top coin is on an upward trend and fall when there’s a retreat. For example, most of them surged by double digits recently when Bitcoin broke the resistance at $90,000 and reached $105,900.
In this case, altcoins are falling because Bitcoin has failed to cross the resistance at $105,000 and retest its all-time high.
Crypto prices are also crashing because of profit-taking among investors who benefited from the recent surge. Indeed, some of the top gainers during the rally have become the top laggards.
For example, Bonk, which dropped 26% from its monthly low, was up almost 200% from its lowest level in April. Similarly, Floki was up 162%, while PENGU was up over 330%. It is common for cryptocurrency prices to retreat after a strong rally.
The crypto market is also falling because of the overall market risks. While the US reached a truce with China, it maintained a 30% tariff. Officials also maintained the baseline 10% tariff on most goods from the UK, and talks with Japan have stalled. As such, there is a risk of a recession in the US, with Polymarket traders bringing the odds to 38%.
Meanwhile, Moody’s, one of the top three rating agencies, downgraded the U.S. on Friday after the market closed. It cited the country’s large public debt and Washington politicians’ deteriorating fiscal policies.
Will the crypto market go back up
The best way to predict whether crypto prices will bounce back is to look at Bitcoin. On the daily chart, there are signs that it is slowly forming the bullish pennant pattern, comprising a vertical line and a triangle pattern.
Bitcoin is also forming a cup-and-handle pattern, a popular bullish continuation sign. It also remains above the 50-day moving average. Therefore, it may bounce back and hit its all-time high of $109,300.
Moving above that level will point to more gains in this cycle, leading to a strong rebound of most altcoins.
