Top 5 Reasons for Todays Crypto Market Downturn
The cryptocurrency market faced its third consecutive day of declines, signaling pervasive negative sentiment. Market capitalization dropped by $90 billion to $2.17 trillion, reflecting a 3.67% decrease over the past day.
Bitcoin, the dominant player, experienced a 3.27% decline, falling to $58,067.63 within 24 hours. This follows a previous drop to $60,490 on July 1, attributed to selling pressures and actions by the German government.
A pressing question looms: is Bitcoin embarking on a prolonged downturn or merely encountering a temporary setback? According to Wise Advice, a crypto analyst, the market’s downturn stems from various factors including substantial withdrawals, liquidations, mining activities, government interventions, and market sentiment indicators.
Spot ETFs witnessed significant outflows, exacerbating the situation. On July 3, the BTC ETF saw another outflow, while a large crypto whale sold millions worth of altcoins, incurring substantial losses. Lookonchain, a leading blockchain analysis tool, reported significant sales of various tokens by this entity.
Liquidations have also surged, exerting immense pressure on the market. BTC liquidations soared from $14 million to $36 million, triggering widespread sell-offs and further depressing prices.
The decline is compounded by BTC miners’ capitulation, driven by a persistent low hash rate that diminishes earnings. Many miners are compelled to sell BTC to sustain operations or shift to other tokens for profitability.
Adding to market jitters are actions by the German government, which, despite not yet selling any coins, has unsettled investors. This uncertainty has prompted preemptive selling among holders fearing potential market impacts.
The overall sentiment has turned bearish, underscored by negative trends in Bitcoin flows across spot and derivative exchanges. Analysts warn of a midterm bearish outlook, especially since Bitcoin lost key support levels in June. Attention now shifts to maintaining support above $60,000 amid a weekly Relative Strength Index (RSI) nearing 50. There’s concern that prolonged bearish sentiment could drive Bitcoin towards $48,000 before any potential recovery, testing its resilience in turbulent market conditions.
In conclusion, the question remains whether Bitcoin’s future resembles a roller coaster ride or smooth sailing ahead, leaving investors to speculate on its next moves amidst ongoing market volatility.
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Crypto news