Why is the cryptocurrency market down today? Here are the top 5 reasons

The cryptocurrency market has seen a third consecutive day of negative price activity, reflecting growing negative sentiment. The overall market value has fallen by $90 billion to $2.17 trillion, marking a loss of 3.67% over the past day. Bitcointhe market leader, saw a 3.27% decline to $58,067.63 in 24 hours, after previously falling 3.6% to $60,490 on July 1 due to selling pressure and the shares of the German government.

The burning question on everyone’s mind is whether Bitcoin is in a long-term bearish trend or is it simply a temporary setback.

According to cryptocurrency analyst Wise Advice, the market is down for several reasons, including massive withdrawals, liquidations, mining activity, government actions, and market sentiment indicators.

Why does cryptocurrency dumping happen?

Major whale flows and movements

Another outflow has hit the BTC ETFs July 3. In altcoins, 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 worth $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 rising liquidations. Just yesterday, BTC liquidations reached $14 million, but today that figure has risen to $36 million. These large-scale liquidations have triggered widespread selling, pushing the price down further. BTC price.

The miners’ struggles

Currently, BTC miner capitulation is one of the main factors contributing to the price decline. The mining community is under pressure due to a persistently low hash rate that leads to a decrease in earnings. As a result, many miners are selling their BTC to maintain operations or switching to other proof-of-work tokens to sustain profitability.

Government actions fuel panic

The German government’s actions have added to market fears. The government has recently moved BTC around, causing panic among investors who are preemptively selling their holdings in anticipation of potential market impacts, despite the government not having sold any coins yet.

Bearish market sentiment

The overall market sentiment has turned bearish. A chart tracking Bitcoin flows in spot and derivatives exchanges currently shows a negative outlook, with red indicating bearish sentiment and green indicating bullish sentiment.

Additionally, Bitcoin has 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 continues, Bitcoin could drop to around $48,000 before potentially rebounding, marking a critical test of its resilience amid ongoing market turmoil.

Read also: Here’s How Much Bitcoin Price Can Fall? A Top Analyst Says

Where do you see the cryptocurrency market headed? Bullish or Bearish? Let’s hear your predictions!

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