Recently, many crypto assets have faced volatility issues, and the crypto market heatmap has become dominated by red. This is not the first time, as the crypto market is experiencing significant price fluctuations and volatility issues as the second quarter of 2024 begins.
This is a clear indication of today's market decline, where cryptocurrencies are falling. Many people fear a market crash and end up selling their cryptocurrencies, which could lead to selling pressure.
In this blog, let's discuss why the cryptocurrency market is falling today.
Overview of the virtual currency market
The global cryptocurrency market capitalization is $2.53 trillion, facing a decline of 4.38% in the past 24 hours. Volume also decreased to $96.15 billion.
While there has not been a huge price drop in the case of Bitcoin and Ethereum, cryptocurrencies such as Dogwifat, Wormhole, and several other meme coins have fallen significantly. As for meme coins, the overall market capitalization has decreased by 6.39%, but the trading volume is about to recover.
Also read: Ripple CEO Brad Garlinghouse’s crypto predictions for 2024
Previously, the Solana network was trending and dominating the cryptocurrency market. Currently, the Solana ecosystem is facing a market cap decline of 3.37%. This decline in the overall cryptocurrency market also affected stablecoins, with their market capitalization decreasing by 0.14%.
Compared to other cryptocurrencies, AI altcoins have fallen the most. AI Ecosystem market capitalization decreased by 6.48% and trading volume decreased by 7.78%.
Why is the cryptocurrency market falling today?
Market volatility often leads to such price drops, causing the cryptocurrency market to collapse. Reasons such as market sentiment and entering a correction zone are relevant this fall.
market sentiment
Fear and Greed Index data changed from yesterday's score of 79 to 75. This is a transition from almost too greedy zone to just too greedy zone. This indicates increasing selling pressure in the crypto market, with investors selling cryptocurrencies instead of buying or holding them.
Although the current change in sentiment is not significant, the market is moving more slowly when compared to March data.
Cryptocurrency liquidation
According to data from Coinglass, around 99,403 crypto traders fell victim to liquidity in the past 24 hours. The total liquidation data includes him $274.74 million, and on Bybit alone he is responsible for liquidation of $8.38 million.
Bitcoin, Ethereum, and Solana are the cryptocurrencies most affected by this liquidation.
Market correction before halving
Bitcoin's halving is just a few days away, and mining rewards will be cut in half after that. This reduces production, which helps maintain Bitcoin's scarcity, but it also affects miners.
Also read: 2 altcoins to sell before Bitcoin halving
Analysts have confirmed that a Bitcoin correction will occur before the current halving event. This correction lasts for several days before the price rises before the halving, and can continue for a long time after the halving.
Although this effect is better, analysts believe that after the halving, miners will migrate to other proof-of-work networks.
final thoughts
Factors such as market sentiment and liquidations play a major role in cryptocurrency market performance. As of now, the crypto market is in a slump, with some cryptocurrencies suffering losses and losing several days of gains. However, it may recover within a few days.
Read more: Top 3 most profitable meme coins right now
