Markets
Why is the crypto market in decline today?
Despite many uncertainties, the crypto market was performing well, even bullish, until today. The market has stabilized after a period of recovery last month and the results of US employment data. The U.S. government created 272,000 jobs in May, well above all expectations and forecasts. However, ongoing political changes and other causes have led to the decline in market conditions. In this blog, let’s discuss why the crypto market is in decline today and the possible reasons that are causing it.
Crypto Market Terms and Conditions
According to fear and greed index
, sentiments have shifted from greed to neutral today, followed by days of decline in global stock market capitalization. The market capitalization now stands at $2.45 trillion after a sharp drop in the prices of different cryptocurrencies. Almost all other cryptocurrencies are in a downward trend today, and the crypto market heat map is in red.
Analyzing the categories individually, the market has improved somewhat as the market cap of meme coins has regained some strength after yesterday’s 3.38% drop, while the market cap of Solana networks is still down of 1.88%. More importantly, the largest decline was recorded in Gaming cryptocurrencieswhere a 5.5% drop is noticeable, followed by AI tokens with 3.16%.
Main reasons why the crypto market has declined today
The biggest impact on the crypto market has to come from the results of the European Parliament elections. These results have influenced crypto users’ feelings regarding upcoming regulations and discussions in this sector. Additionally, economic factors became another factor when the European Central Bank introduced a 25 basis point rate cut, which is good news, but economic growth could impact cryptocurrencies. Now, like the US Fed meeting
is in session, this also disrupts investor sentiment since three reductions in the inflation rate are expected to take place this year.
Furthermore, the results of the Indian elections have had an impact on the performance of the Indian stock market, the effect of which is also considerable on the cryptocurrency market. With results predictable but not entirely satisfactory, investors are spooked, causing periods of consolidation for both markets.
Finally, Bitcoin charts earlier showed the presence of the bear flag pattern, leading to a decline in price. Bitcoin has a major impact on the crypto market performance due to its dominance. Bitcoin dominance has crossed the 54% mark, currently at 54.2%, which is quite high. With the BTC Price falling to $67,452, the rest of the cryptos also declined. However, analysts do not expect a continued decline in Bitcoin price, which is a good thing. But any further decline could even send the market tumbling, as Ethereum Price is already in difficulty, and another significant drop is not favorable for investors.
Continue reading 10 Top Cryptos That Outperformed Bitcoin This Year