In 2024, the Crypto market began positively. Many crypto assets have started to recover from last year’s losses but In March a sudden fall in the market. The total market capitalization of cryptocurrencies is $2,6 Trillion, after a fall of 5.85%. The market trading volume has increased by $197,23 billion after increasing by 43.85 %.
Many of the cryptocurrencies that have been high in demand from the last few weeks have now lost most of their value, including Bitcoin, which has gone from its all-time high (ATH) value of $73,750.07 to a low of $67,002.19 after a drop by 8.7 percent.
Table of Contents
Why the Crypto Market is down?
The crypto market has to face unexpected bear attacks, even in bullish situations. Most crypto tokens have to show a similar factor when facing a fall before tomorrow. The top crypto investors and market analysts are taking a small step back before aiming for high.
There were four main reasons for the crashed market:
- Liquidation issues
- Market correction
- Panic Selling
- U.S inflation
Liquidation issues
According to the coinglass data, substantial liquidation issues for cryptos like BTC, ETH, and SOL were made public. Till yesterday, bitcoin helped to improve the performance of altcoin, but Bitcoin faced a fall in value from the $70,000 range to the $60,000 range. The altcoins appear to comply with that as well. Over $666 million really well worth of crypto has been liquidated inside the market. Out of which, the long-term traders are responsible for $531 million.
Talking of Bitcoin, liquidation hit $246.66 Million, out of which $195.61 Million is uneasy with the long positions, and the remaining $47.05 belongs to short positions.
Ethereum upgrade has led to the price liquidation for the coin, where a total comes out of $116.07 Million in liquidation. $94.86 Million is subjected to long-term investors, whereas $21.21 Million is for short-term traders.
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Market correction
Crypto is making a comeback after years of low profit-making. BTC, meme coin, and the rest altcoins are doing extremely well. Ethereum went high $4k earlier but now has dropped to $3.764.
The same is true for many other cryptocurrencies. After a successful day in the market, there is usually a small drop. This is known as the market equilibrium.
Analysts such as Captain Faibik believe that the crypto market will experience a correction before the halving (A process that reduces the number of new bitcoins created and earned by miners in half) of Bitcoin. According to his forecast, the cost of Bitcoin will drop to $60k before recovering to target another altcoin market value.
Also, J.P Morgon predicts that the value of the bitcoin will drop art $42k after April.
Panic Selling
Panic selling happens when investors sell their tokens out of fear that the market will crash or fall. The sequence of selling eventually leads to a price drop. However, the market hasn’t fallen off the cliff yet, and it can make a comeback soon. This is a great time for short-term traders to capitalize on this opportunity.
Now the market has reached its highest level in 3 years, investors don’t want to lose the opportunity to get the best price. Many altcoins have reached their ATH value just in the last couple of days, the prices may have fluctuated from time to time, which can lead to panic selling. Traders don’t want to miss out on the opportunity that they can get right now, rather than putting off the selling offer for months to turn a profit.
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U.S Inflation
The US Federal Reserve’s decision to increase interest rates has created tension in the crypto market. Bitcoin crossed the $31,000 mark in July 2023 and is once again at a low of $27,000 in August 2023. However, it has shown incredible recovery in October at $34,495, and as of today, it is at an outstanding level of $63,000. This has caught the crypto investors’ attention and made them nervous.
March 4, 2024, Bitcoin is trading at $63,667, and Ethereum is trading at $3,472. So far, the crypto market has responded positively to the global financial turmoil and is still resilient despite rigged credit conditions and volatile bond markets.
Conclusion
The crypto market has shown resilience in its face. However, recent challenges became the reason for the downfall of the market, such as liquidation, market correction, panic selling, and US Inflation. Bitcoin is now at USD 63,667, and ETH is now at USD 3,472. In the face of global financial instability, resilience has proven to be the key to growth and stability. The crypto market responded positively to the global financial uncertainty and tried to be strong in the face of the downfall of the market. It is also the nature of cryptocurrency to be volatile.
F.A.Q (Frequently Asked Question)
What caused the recent downturn in the crypto market?
There are four reasons:-
– Liquidation issues
– Market correction
– Panic selling
– U.S. inflation
What predictions do analysts have for the future of Bitcoin’s price?
J.P Morgan and market analysts predict a potential fall in Bitcoin’s price, with estimates ranging from a to $60,000 before recovering to predictions as low as $42,000 after April.
How has the crypto market responded to global financial turmoil?
The crypto market has shown resilience, responding positively to global financial instability and remain constant in the environment of credit conditions and bond market instability.
