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Why is the cryptocurrency market down today? Here are the main reasons
Today, the cryptocurrency market crashed, and here’s an in-depth look at what’s happening:
The market decline reflected a broader sell-off in traditional markets, influenced by increased geopolitical tensions and economic uncertainty. So while traditional markets reeled, cryptocurrencies didn’t miss a beat in joining the crash.
During afternoon trading hours in the United States, Bitcoin suffered a sharp drop below the $66,000 mark after nearly touching $71,000 just a few hours earlier.
As of this writing, Bitcoin has clawed it’s back to exactly $69,934, a 5% drop in just the last 24 hours. Not far behind, Ethereum saw a dramatic 12% drop to $3,100 before paring some losses to $3,230 as of this writing.
The recession was not a smooth slide but rather a free fall. Futures market data highlighted a brutal session for traders using leverage. Over $400 million in leveraged positions were liquidated in just one hour.
Binance traders faced the brunt, with liquidations totaling $171 million, while their counterparts on the market OKX Exchange saw $158 million wiped out. The total damage on the market in the last 24 hours? Second Coinglass.
This market crash coincided with a decline in US stock markets, reacting to new inflation data that pointed to a third consecutive month of acceleration. This warmer-than-expected consumer price index (CPI) dampened any remaining optimism for the Federal Reserve’s short-term interest rate cuts, throwing a wet blanket on hopes that inflation was close to being under control.
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Amid this catastrophe, Bitcoin managed to increase its market dominance to nearly 56%, reaching a peak for this market cycle. This means that even if markets crash, Bitcoin somehow finds a way to strengthen its position as the king of cryptocurrencies.
Looking ahead, the crypto community has its sights set on the upcoming halving event scheduled for April 21st. Historical trends and expert opinions, including the reflections of Arthur Hayes, suggest that the event could trigger many more price corrections.
With all these factors in play, today’s market movements are a puzzle of investor sentiment, economic indicators, and upcoming major crypto events.
Did you know : Hong Kong is ready to launch major Bitcoin and Ethereum ETFs