The global cryptocurrency market capitalization has fallen by 5.85% to $2.6 trillion, but the market trading volume has increased by $197.23 billion after rising by 43.85%. Many cryptocurrencies, including Bitcoin, have lost their accumulated value over several weeks. It fell 8.7% from its ATH value of $73,750.07 to $67,007.19. So what is happening to the market? Let's discuss it in this blog.
Main reasons why the virtual currency market fell
Cryptocurrency markets, even in bullish conditions, have to deal with sudden bear attacks. Most cryptocurrencies are showing similar factors of facing declines from yesterday. Top crypto investors and analysts suspect there will be some setbacks before aiming higher. There are three main reasons for market crashes: – Liquidation problems, market corrections, and panic selling.
liquidation problem
Coinglass data reveals substantial liquidation issues for cryptocurrencies such as Bitcoin, Ethereum, and Solana. Bitcoin bullishness has helped altcoins perform well in the past, but now that Bitcoin has fallen from the $70,000 mark, it looks like altcoins will follow suit. $666 million worth of cryptocurrencies were liquidated on the market. Of this amount, long traders will be responsible for $531 million.
Speaking of Bitcoin, the liquidation amount amounted to $246.66 million, of which $195.61 million relates to long positions and the remaining $47.05 belongs to short positions.
The Ethereum Dencun upgrade resulted in a price clearing of the coin, bringing the total cleared amount to $116.07 million. $94.86 million is for long-term investors and $21.21 million is for short-term traders.
Balancing the virtual currency market
After years of low returns, cryptocurrencies are finally making a comeback, with Bitcoin, memecoins, and the rest of the altcoins performing extremely well. Ethereum recently soared above $4,000, but has fallen to $3,678.58. This is the case with many other cryptocurrencies at the moment. After a successful day in the market, it is common for there to be a slight decline, which is called market balance.
Also read: Ethereum Dencun Upgrade: Everything you need to know
Analysts like Captain Fibig predict that a market correction will occur before the Bitcoin halving occurs. He predicts that Bitcoin price will fall to $60,000 and then rise to target another ATH value.
panic selling
The market is at its best in three years, and investors don't want to miss out on the best value. Many altcoins have reached their ATH value in the last few days, and from there the price has fluctuated all over the place, which may have caused a panic selling situation. People would rather not miss out on the current maximum price than hold off on selling for months to make a profit. Panic selling occurs when investors start selling their tokens due to fear of a market crash or decline. This series of selling eventually leads to a fall in price.
The market is not completely down and may recover soon. For short-term traders, this is an opportunity to make the most of this market.
conclusion
There are many volatility factors in the cryptocurrency market where price spikes and falls can occur at any time, and using technical analysis can help you withstand maximum profits and minimum losses. In addition to that, it helps to have proper knowledge about the cryptocurrency market. At the moment, many cryptocurrencies are facing a decline from their previous highs, but it could be a small decline. These cryptocurrencies may soon make a comeback.
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