Markets
Why is the cryptocurrency market down today? Here are the top 5 reasons
The cryptocurrency market saw a third consecutive day of negative price activity, reflecting growing negative sentiment. The overall market value fell by $90 billion to $2.17 trillion, marking a loss of 3.67% over the past day. BitcoinThe market leader, fell 3.27% to $58,067.63 in 24 hours, after falling 3.6% to $60,490 on July 1 on selling pressure and actions from the German Government.
The pressing question on everyone’s mind is whether Bitcoin is in a long-term downtrend or if this is just a temporary setback.
According to crypto analyst Wise Advice, the market is declining for several reasons, including massive withdrawals, liquidations, mining activity, government actions, and market sentiment indicators.
Why are cryptocurrencies dumping?
Main outgoing flows and movements of whales
Another flow hit the Bitcoin ETF On July 3, a crypto whale sold millions of dollars worth of coins, suffering significant losses. Leading blockchain analytics tool Lookonchain said that this whale or institution sold 3.13 million LDO tokens for $5.77 million, 49,771 AAVE tokens worth $4.54 million, 269,177 UNI tokens worth $2.41 million, and 250,969 FXS tokens worth $708,000.
Liquidation on the rise
The market has also been hit hard by the surge in liquidations. Just yesterday, BTC liquidations reached $14 million, but today, that figure has shot up to $36 million. These large-scale liquidations have triggered widespread selling, which has pushed the price down further. The price of BTC.
Miners’ struggles
Currently, BTC miner capitulation is one of the main factors contributing to the price drop. The mining community is under pressure due to a consistently low hash rate, which is leading to a drop in profits. As a result, many miners are selling their BTC to maintain their operations or switching to other proof-of-work tokens to maintain profitability.
Government measures fuel panic
The German government’s measures have increased market fears. Recently, the government has been circulating bitcoins, causing panic among investors who are preemptively selling their holdings in anticipation of a possible market impact, although the government has not yet sold cryptocurrencies.
Bearish market sentiment
The overall market sentiment has turned bearish. A chart tracking Bitcoin flows across spot and derivatives markets currently shows a negative outlook, with red indicating bearish sentiment and green indicating bullish sentiment.
Additionally, Bitcoin lost several key support levels in June, suggesting a medium-term bearish trend. The focus is now on holding support above $60,000 as the weekly Relative Strength Index (RSI) approaches 50. Analysts warn that if bearish sentiment persists, Bitcoin could drop to around $48,000 before potentially rebounding, marking a critical test of its resilience amid continued market turbulence.
Read also: How Far Can Bitcoin Price Go? A Renowned Analyst Gives His Opinion
Where do you think the cryptocurrency market is heading? Bullish or bearish? Let us know your predictions!