Bitcoin’s price experienced a dramatic flash crash on February 3, plunging from $100,000 to a low of $91,300, before consolidating within the range of $95,500 to $99,000. This volatility has left the broader cryptocurrency market in a state of caution, with Bitcoin dominance nearing a four-year high, leaving altcoins struggling to gain momentum.
Solana, a major player in the altcoin space, saw a significant correction in its market capitalization, dropping to $9.96 billion — a 7% loss within 24 hours, according to CoinGecko data. The decline has been partly attributed to the controversy surrounding the LIBRA and MELANIA meme coins, and the alleged connections to entities that reportedly withdrew $100 million from these assets, further diminishing investor confidence in Solana’s meme coin ecosystem. This has contributed to a broader decline in sentiment, with demand among traders waning.
Bitcoin’s Flash Crash and Market Outlook
Bitcoin’s rally to $100,000 and subsequent all-time high of $109,588 in early 2024 ignited a bullish market. However, the flash crash in February 2025 marked a sharp correction, as the largest cryptocurrency fell to $91,231. Since then, Bitcoin has traded in a narrow band between $95,500 and $99,000, reflecting a cooling of trader sentiment.
Market volatility, fueled by U.S. macroeconomic developments and political uncertainty surrounding President Donald Trump’s executive actions, has created a turbulent environment. Bitcoin’s volatility decreased from a high of 2.07% on February 6 to 1.53%, signaling a period of stability — at least in the short term. Despite this, experts believe Bitcoin has not yet reached its cycle top, with the long-term outlook remaining uncertain.
Altcoins Struggling as Bitcoin Dominance Soars
The total market capitalization of altcoins, excluding Bitcoin, is currently hovering around $1.19 trillion, down nearly 20% in February 2025. Altcoins continue to consolidate as Bitcoin dominance remains near a four-year peak. If Bitcoin dominance begins to decline, capital may shift into altcoins, potentially triggering a new altcoin season.
At present, Bitcoin remains relatively stagnant, with its volatility dropping to eight-month lows for the 7-day period and 30-day lows not seen since October 2024. Trading volume across exchanges has diminished, resembling pre-election levels, as professional traders adopt a more risk-averse stance. This cautious sentiment is reflected in the narrowing contango and falling CME basis, suggesting that institutional exposure to crypto has slowed.
Traders are closely monitoring the Altcoin Season Index, which currently reads 45 out of 100. This indicates that it is not yet an ideal time for altcoin rallies. However, many see this period of consolidation as an opportunity to accumulate assets ahead of a potential recovery.
Top Altcoins to Watch
As altcoins continue to consolidate, certain tokens are seen as potential opportunities for future gains. Three altcoins currently in the buy zone are Bittensor (TAO), Pyth Network (PYTH), and Dogecoin (DOGE).
Pyth Network (PYTH): After several months of decline, Pyth is showing signs of potential recovery. The token has dropped to $0.2031 but technical indicators suggest a 25% rally to a key resistance level at $0.2548 could be in store. Support is seen at $0.1739, should the market face further downward pressure.
Bittensor (TAO): With upcoming upgrades like the Dynamic TAO upgrade and the launch of subnet AI tokens, TAO is expected to break out of its downward trend. The token could test resistance at $445, marking a 16% potential gain. Support is found at $341.
Dogecoin (DOGE): Dogecoin, the largest meme coin, has been consolidating after a prolonged downtrend. A daily close above $0.30 could signal a trend reversal, with technical indicators supporting nearly 20% gains in the coming weeks. Support is located at $0.21659.
Bitcoin Price Forecast
Despite the recent consolidation, Bitcoin’s outlook remains uncertain. Derivatives market data indicates that traders have taken a cautious stance, with premiums on futures contracts continuing to fall, and open interest remaining stagnant. There is little indication of a significant influx of new capital into the market, and risk aversion among traders is high.
Nick Forster, founder of Derive.xyz, noted in an exclusive interview that Bitcoin’s implied volatility is low compared to Ethereum, suggesting that BTC may be undervalued at the moment. He also pointed out that geopolitical developments, such as peace talks in Israel and Ukraine, could influence Bitcoin’s price trajectory. However, Forster forecasts a reduced likelihood of Bitcoin surpassing $115,000 by the end of the quarter, with the probability dropping to 12% from 17% the previous week.
At the time of writing, Bitcoin is trading at $95,689, with its short-term volatility showing signs of stabilizing. Traders will continue to watch for signs of a breakout, either into a new rally or a deeper consolidation phase.
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