Today I want to give you a quick update on what’s going on with the cryptocurrency market. This update will focus on recent price action and provide insights on whether or not you should be concerned — as well as what you should be doing right now.

I’ll also discuss key charts, starting with Bitcoin (BTC) and Ethereum (ETH). These two cryptocurrencies are crucial indicators for the market this week.

Additionally, I’ll review some altcoin charts to highlight unusual trends we’re observing in the market.

As always, catch my full analysis in the video here or feel free to read the summary below:

Bitcoin Analysis

Let’s start with Bitcoin. In the past couple of weeks, Bitcoin has broken below its uptrend, leading to a market sell-off.

Over the weekend, prices dipped further, with Bitcoin reaching just above $58,000 before closing above $60,000 on Monday. This close is significant because it was higher than the May 1 close of around $58,000.

Since then, Bitcoin has rallied slightly, gaining about $3,000 to sit just above $61,500.

However, it’s too early to say whether Bitcoin has bottomed out. The market remains in a short-term downtrend, and we need to see sustained positive momentum and support at current levels.

This week, it’s crucial for Bitcoin to regain its $62,000 level.

Watching the price action as we close out today and tomorrow is important. We need two consecutive green days to indicate a potential bottom.

If Bitcoin breaks below $58,000, it could lead to a more sustained correction. So keep an eye on this key level in the coming days.

Ethereum Analysis

Moving on to Ethereum, the chart doesn’t look as bearish as Bitcoin’s, which is noteworthy.

Ethereum recently sold off, losing the $3,500 level and dipping to around $3,200. However, ETH has since bounced back to about $3,300.

Like Bitcoin, Ethereum needs to show positive momentum to avoid further downside. However, Ethereum’s chart looks more neutral than Bitcoin’s, and it is trading well above its May 1 lows.

The big 20% daily gain in May has kept Ethereum in a relatively stable position, indicating it’s not at risk of a sustained bearish phase.

We need to see some positive price momentum to confirm that the market has bottomed out and to prepare for the next bull market leg.

While both Bitcoin and Ethereum have struggled recently, Ethereum’s stability offers some optimism.

Altcoin Analysis

When BTC and ETH sell off, altcoins tend to suffer more significant losses. Over the past few weeks, most altcoins have dropped around 50% from their March highs.

However, some altcoins have fared better and even shown signs of bottoming out. This is an interesting development worth monitoring.

For example, let’s look at Aave (AAVE). Despite being down about 40% from its March high, Aave has held up better over the last two weeks.

While Bitcoin and Ethereum sold off over the weekend, Aave remained relatively stable and has even gained about 12% this week. It has been trading in the same range since mid-April, indicating a potential bottoming phase.

Another altcoin to consider is Chainlink (LINK). Similar to Aave, Chainlink is down about 40% from its March highs but has not broken below its mid-April lows. It has shown strong support at the $13 level, bouncing off this level recently to trade at $14.

This strong support suggests that Chainlink may also be in the process of bottoming out.

Final Thoughts

The key level to watch in the crypto market right now is the $58,000 level for Bitcoin. A break below this level could lead to further downside and increased bearish sentiment.

However, if Bitcoin holds above this level and gains positive momentum, it could signal a market bottoming phase.

This current sell-off is typical healthy market behavior, with no fundamental changes in the crypto market. In fact, we’ve seen positive news, such as the potential approval of an Ethereum exchange-traded fund (ETF) and favorable political and regulatory developments.

Market corrections often follow massive run-ups in price, such as those from 2023 to early 2024.

Summers tend to be slow periods for the crypto market, so this isn’t surprising. It’s essential to maintain perspective and avoid getting caught up in short-term fluctuations.

The market is in a neutral period after the March highs, and if Bitcoin holds above $58,000, we could see the market bottom out in the coming weeks. This would set the stage for the next leg of the bull market as we head into the fall.

Stay patient and attentive. This is not the time to panic. Members of Crypto Trend Investor should keep an eye out for buying opportunities in the next few weeks.

If Bitcoin holds the $58,000 level and gains positive momentum, it could be a great time to enter the market and position for the next bull run. Stay tuned, and I’ll see you next time.

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This article previously appeared on Investing Daily.