Crypto market pulls back as Bitcoin fails to sustain rally

The crypto market has seen another pullback as Bitcoin failed to sustain its break above key resistance on Thursday.

Today 20 September, most crypto assets have turned red on the 24 hour charts following a short-lived rally led by Bitcoin. 

This could imply that the next sustainable rally may be a bit further away than initially thought, even though rate cuts have happened and  S&P 500 has reached a new all-time high.

Week momentum

Bitcoin entered a bullish rally yesterday, followed by altcoins which returned optimism to investors and fans. This rally was likely sponsored by two factors — rate cuts and S&P 500 rally.

A rate cut by the Fed usually increases investor confidence, thus encouraging them to take risks, while the S&P 500 rally is a natural catalyst for Bitcoin because of the coupling between the two.

However, the two factors combined were not able to keep Bitcoin and by extension the entire market safely above the resistance.

The number one crypto asset broke through the resistance at $117, 300 which analysts said was the only roadblock to a new all-time high. Bitcoin traded as high as $17,8000, but has today corrected back to $115,600 at the time of reporting.

Because of this, altcoins have also corrected to lower prices following the rally, which raises questions on whether or not the expected altcoin season will come any time soon.

Effect on investors

It remains to be seen what happens in the coming days, but the current correction may spark fear, uncertainty and doubt (FUD) among some investors and cause them to panic sell. 

If this plays out, a further correction may be the outcome, which may take the market longer to recover from unless the sentiment turns around suddenly and quickly.