Crypto Crash: Global Downturn Drags Crypto Market Down

The crypto market is currently experiencing a significant downturn, with the total market capitalization declining by nearly 5% in just one day. This bearish trend has engulfed all the top 100 cryptos, painting a gloomy picture for the entire crypto landscape.

At the heart of this market turmoil lies a confluence of factors, both within the crypto realm and the broader global economic landscape. The Crypto Fear and Greed Index, a widely recognized gauge of market sentiment, has returned to neutral territory for the first time since January 2024, signaling a departure from the overall greedy mood that had prevailed throughout the year.

Technical Analysis:

Bitcoin Bearish Signals-

Over $300 million in liquidations have pulled down the market’s leading cryptocurrency, Bitcoin, which has dropped to almost $58,000, an 8.82% loss in the last day and a 13.5% loss over the previous week. Bitcoin’s compression period, which started on April 9, 2024, appears to have ended, according to technical analysis indicators. The bearish movement of today is the result of a succession of lower highs caused by the inability of the cryptocurrency to break through the $71,500 resistance level.

Ethereum Echoes The Gloom-

ETH, the second-largest crypto, mirrors Bitcoin’s downtrend, today being the strongest red candlestick since April 13. The coin has fallen from $3,164 to its current price of $2,875, down 8.9% in the last 24 hours and 11.79% in the previous 7 days. Like Bitcoin, the indicators for Ethereum also suggest a bearish short-term outlook, with a possible bounce in longer timeframes.

Beyond Crypto:

The worldwide financial markets are also in a slump, which is being ascribed to apprehensions about the US Federal Reserve’s upcoming interest rate decision, unpredictability surrounding corporate earnings, and the expectation of noteworthy macroeconomic events. The problems plaguing the cryptocurrency market are not unique.

Investors are closely monitoring the Federal Reserve’s stance on rates, with the central bank’s two-day monetary policy meeting underway and a decision and press conference scheduled for tomorrow. Updated inflation metrics and the next U.S. jobs report will also be key factors influencing market sentiment, as nearly 200 companies in the S&P 500 are set to report their results this week.

Interestingly, April has been the only bearish month for the S&P500 since October 2023, and the Fear and Greed Index for stock markets has entered the fear phase for the first time since October 2023. This broader market sentiment is also impacting the crypto market, especially now that Bitcoin is part of more trading portfolios following the approval of spot ETFs.

What’s Next?

The near future remains uncertain. If the bearish trend persists, Bitcoin could test its current support near $55,500 before potentially dipping to $50,000. Ethereum might encounter a strong support level of around $2,500. Conversely, a bullish bounce could see both coins recover modestly but remain within a compressed trading zone.

Stay Informed:

This crypto cooldown serves as a reminder of the market’s volatility. Keep an eye on the Fed’s decision, upcoming economic data, and corporate earning reports for clues on the market’s direction. Remember, this is just a temporary setback, and the crypto market has a history of bouncing back stronger.

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