Markets
Why is the crypto market bearish today?
After a brief recovery period, the crypto market experienced another setback characterized by a decline in overall trading volume to $63.63 billion, the lowest in weeks. This slowdown is underscored by a 17% decrease in total volume in one day, along with a drop in the global crypto market capitalization to $2.3 billion and a shift away from bullish sentiments in the Fear and Greed Index.
Cryptography Market perspectives
The recent downtrend has badly affected Bitcoin and Ethereum, with Bitcoin trading at $62,309.95 after a 2% drop and Ethereum at $2,999.41 after a 2.2% drop. This downward trend appears to continue, also impacting other cryptocurrencies.
On May 7, the total cryptocurrency market value held steady at $2.35 trillion, with Bitcoin rising slightly to $63,550. However, other major cryptocurrencies like Ether, XRP, Dogecoin, Cardano, Toncoin (TON), and Avalanche have experienced modest drops ranging from 0.5% to 2.5%. These declines were largely attributed to increasing uncertainty in traditional markets.
Factors Leading to Crypto Freefall
Here are several factors that have contributed to the current crypto market decline. The market has been stagnant for weeks, with little upward movement. However, today’s drop was triggered by new regulatory concerns in the crypto market. A decrease in ETF Bitcoin Futures and exchange inflows further dampened investor sentiment, leading to bearish conditions.
SEC disrupting the crypto market
Firstly, regulatory issues are back, worrying investors. The SEC has served well to perceive Robinhood for violating securities laws. In response, Robinhood stopped supporting certain cryptocurrencies that the SEC says are securities. This is similar to Robinhood before when other exchanges faced regulatory issues.
Smallest Bitcoin Futures ETF Outflows
The market has high aspirations for Bitcoin and Ethereum ETFs in Hong Kong; however, Bitcoin Futures ETF outflows over the past four weeks have weakened the market. The outflows affected the price and popularity of Bitcoin, with $284 million in outflows affecting the market.
Bitcoin Trade Flow Rate Is Low in a Decade
Moving forward, the rate of Bitcoin inflows between exchanges, the lowest in a decade, has fallen to levels last seen in 2015, suggesting a change in the broader market trend. Long-term holders have stopped selling, opting to reaccumulate Bitcoin, potentially signaling a move toward an accumulation phase.
Analyst says BTC will plummet
Some experts think Bitcoin could fall below $50,000 before rising again to new highs. They believe the market is entering a phase where people accumulate Bitcoin, which could mean more ups and downs and chances for investors to make gains in the future.