Markets
With Bitcoin Below $56,000, Why Is the Crypto Market Crashing Today?
With a 4% drop on Sunday, bears crushed Saturday’s rally in Bitcoin and pushed the altcoin market back into bearish territory. By compromising the chances of a week of recovery, the increase in supply influences a drop this Monday in the early hours of Asian trading.
Bitcoin is trading at $55,269 with an intraday loss of 1.30% and registering a low of $54,296. With a bearish tone, altcoins are starting the week with long sell-offs, and major cryptos are down 5% or more.
Ethereum, Solana, and Toncoin are down 5.25%, 7.23%, and 5.45%, respectively, while meme coins are taking a hit. DOGE, SHIB, and PEPE are down 8.08%, 7.64%, and 12.84%, respectively.
As the Monday blues hit the cryptocurrency market hard, expectations of a bigger crash this week are rising. Let’s take a look at our detailed price analysis of the major cryptocurrencies to get a clearer view of the market.
You can also consult our Bitcoin Price Prediction to determine the chances of Bitcoin hitting the $100,000 mark this year.
Bitcoin Price Evolution
With no follow-up to Saturday’s rally, Bitcoin’s downtrend continues. Breaking below the $56,000 level, BTC is trading at $55,269, down nearly 5% in the last 24 hours.
The bearish influence of the daily chart increases and BTC price breaks below the descending trendline. Sunday’s 4% drop creates a bearish engulfing candle and restarts the downtrend.
Long liquidations in the broader market amounted to $111 million on Sunday, and the trend continues with $75 million in the early hours of Monday. With price action signaling a continuation of the downtrend, long liquidations are strengthening bearish traders.
Bitcoin hash rate decline reaches critical levels
The decline in the Bitcoin network hash rate is a measure of declines in mining activity. According to Cryptoquant, the metric has fallen to levels last seen in December 2022.
Historically, such hashrate drops have coincided with major price movements. The December 2022 drop preceded a notable bullish reversal, suggesting that current conditions could signal a similar price change.
As Bitcoin price plummets, the sharp drop in hash rate could indicate a market bottom or an impending bullish phase. However, this goes against the ongoing price action movement as BTC price falls below $56,000.
While the next support level lies at $52,000, it could be the next rebound point for the bullish rally that is expected to start towards the $100,000 target.
Mt. Gox Payout Continues to Spark Market Concerns
After the collapse of the cryptocurrency exchange Mt. Gox in 2014, the recent repayment plan has caused significant fear among investors. After a decade of waiting, the repayment process has begun and is quickly raising fears of a massive drop in supply in the coming times.
According to the latest trustee document, Mt. Gox creditors will receive Bitcoin (BTC) or Bitcoin Cash (BCH) in the next 2 weeks or 3 months. This will depend on the exchange they choose. While Kraken can take up to 3 months, other exchanges like Bitbank and SBI VC Trade aim to complete payments within the next 2 weeks.
The payout is aimed at preventing a major price drop, although the distribution of around $2.71 billion in BTC could still cause market concerns.
Where is Bitcoin headed this week?
With the FUD race continuing in the cryptocurrency market, bearish moves are likely to continue this week. With Bitcoin having broken below $56,000, the next plausible support lies at the $52,000 mark. Moreover, the downtrend increases the possibility of a deadly crossover of the 50D and 200D EMAs.
Amplifying the crash, altcoins could see a massive drop and deeper liquidations this week.