The crypto market is collapsing; why?

Hello Family,

Hope you all are good,

March 20,2024.

let's start,

The crypto market is collapsing; why?

The market capitalization of cryptocurrency exchanges has dropped by $230 billion in just six days.

In the previous five days, Bitcoin has dropped 11.65% from its all-time high of $73,949 to this move.

With 41% of its value lost in the last week, the AI category of altcoins was the most responsible for the recent collapse.

The two biggest factors contributing to the current bull market are the sharp increase in interest in the Solana ecosystem and the explosive surge in Bitcoin as a result of the ETF's acceptance. However, the most recent movement indicates that a correction is imminent and that the rising impetus is waning.

See also: Weekly Forecast for Bitcoin: Can It Reach $100,000 Without a correction?

The recent surge in cryptocurrency prices

Even with Solana's enormous popularity, the meme coins and their directional bias rely primarily on Bitcoin's indications. The marketplaces for altcoins flourished as long as Bitcoin's price increased. The meme coin and artificial intelligence (AI) sectors in particular outperformed and produced enormous profits.

Two noteworthy altcoins that saw a 500% increase are Worldcoin (WLD) and Fetch.AI, as was previously reported in media. Book of Memes (BOME) and dogwifhat (WIF), two meme coins, have also seen phenomenal increases in value.

Despite a stabilisation in ETF flows, the price of Bitcoin appears to be decreasing following a 54% return so far this year. Since 2023 began, the leading cryptocurrency has increased 347%.

1-day BTC/USDT chart

The crypto market is collapsing; why?

The price of Bitcoin has formed a bearish swing failure pattern (SFP) on a weekly time frame. Investors should proceed with caution because this SFP caused BTC to close below the prior ATH of $69,000.

One-week BTC/USDT chart

As was indicated in the prior piece, Bitcoin's momentum is decreasing, which may be a major factor in the market's collapse. According to CoinGecko data, the short-term decrease in buying pressure has caused market players to book profits, which has caused the entire market capitalization of cryptocurrencies to drop from $2.89 trillion to $2.66 trillion.

Capitalization of the cryptocurrency market

The price of Bitcoin has decreased by around 10% over the last four days, according to CoinGlass statistics, resulting in liquidations of $400 million in the last day alone. $100 million worth of long Bitcoin bets have been lost in the last 24 hours, along with $71 million worth of Ethereum and $28 million worth of Solana.

Heatmap for cryptocurrency liquidation

This trend is only likely to persist if the price of bitcoin keeps declining.

The End.

Thanks for Reading.