Altcoins and Bitcoin investors wonder why crypto is down today or what led to this crypto market drop today which is a regular occurrence in an unpredictable crypto market.
The Crypto Bear Market: To be more specific, it is advisable to provide a deep dive into each element of the plan and its components to better understand the way it is constructed.
This crash was seen on August 26th and saw the total Crypto market capitalization reduce from $2. 216 trillion to $2. 041 trillion of it within a day For the avoidance of doubt, this means that people are buying and selling goods amounting to 041 trillion within the space of a day, And all in the course of conducting business. This $215. The amount of $ 87 billion shows that the negative net balance for the year is 9 billion times larger than it was in the year 2006. 7% decline. But what is the reason for this crypto market down today?
Market Sentiment: It is the so-called Invisible Hand
Sentiment has a strong effect on the crypto’s price progress and fluctuation. A look at the current trend also indicates that investor sentiment has worsened, thus increasing sell pressure. Let’s break down the key indicators:
1. Tether Dominance Surge: The Tether dominance chart that defines Tether’s market cap relative to the approximate total market cap of crypto experienced a substantial 10. 91% increase. This is an alarming sign as investors run to dump most cryptos in exchange for stablecoins an indication that they are losing confidence in the market.
2. Fear and Greed Index: Of course, the Fear and Greed Index that summarizes the current mood on the stock market was probably at the level of fear during the period under consideration.
3. Risk Appetite Decline: The flight to stablecoins seems to indicate that risk has radically reduced in the crypto marketplace.
Technical Analysis:
Our technical analysis of the recent crypto market crash reveals several key factors:
1. Support Levels Breached: The sell-off pressure saw Bitcoin as well as Ethereum slide through two main support levels as a result of sell orders.
2. Resistance Rejections: As illustrated before the crash, BTC and ETH tested their resistance levels, which would pave the way for the downside move.
3. Liquidation Heatmaps: Investigating the liquidation charts of al and Et, indicates that their prices dropped through many short-term clusters of liquidity. Bitcoin thus climbed to the $58k liquidity pool while Ethereum was at the dense liquidation degree of $2490, though it fell to $2415.
Will Crypto Record a Bear Market?
Sometimes it is difficult to predict the market behavior, but based on the existing environment the onset of the bear market is quite possible. But before concluding, it’s important to state that based on the latest information available, both Bitcoin and Ethereum have started recovering, and 3. 84% and 6. respectively achieved in the last 24 hours which are up to 82% gains each.
What to do When the Crypto Market Is Bearish?
Given the current market conditions, here are some strategies to consider:
1. Dollar-Cost Averaging: Keep buying at regular intervals investing small capital, without looking at the prices going up or down.
2. Diversification: It is wise to diversify the investments in different crypto and other forms of investments to minimize the risks.
3. Long-Term Perspective: Try to recall that, the performance of most crypto has always rebounded and was increasing in the long run even with some temporary crashes.
4. Stay Informed: Refer to blog articles from existing crypto exchanges, and reliable dealers such as BITGENIX, among other market analyzing methods.
Looking Ahead: What is the Future of the Crypto Market?
While the crypto market has experienced a significant correction, there are signs of potential recovery:
1. Tether Exchange Reserve: This measure has been moving up gradually since early August and a higher score in this measure suggests increased buying power in the market.
2. Price Stabilization: As of the time of writing this article, the prices have started a recovery process and many of the major altcoins are depicting price increases.
3. Market Consolidation: The crypto market might be forming a consolidation phase in the coming days and could be the right preparation for the next round of the rally.
Conclusion: Understanding Market Dynamics
Even nowadays with the new generation of investors, the recent drop in the crypto market is a good example of the necessity to learn some aspects of the market. Market sentiment, technical indicators, and other factors such as the liquidity level of the shares are some of the factors that determine the price of the shares.
At BitGenix, we were further able to closely track these factors and deliver timely realization and analysis of their impact on our users. Like every other market, the crypto market has its risks but at the same time creates room for those who are informed and tactful in their dealings.
So, anyone who wants to succeed in the world of crypto needs to remember that knowledge is power here. This means that one should always be informed, always be strategic, and should always invest to the best of one’s ability.
BitGenix Technical Analysis Reveals: Why Crypto Prices Are Drowning! was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.