Why is crypto falling today? This is one of the big questions on the minds of crypto investors and traders today, especially after a number of top cryptos, including Bitcoin, recorded some gains this week.
At the time of writing, the global crypto market cap was once again down to $1.23 trillion with almost every top crypto token in the Red. (Check today’s crypto prices here). Bitcoin also fell nearly six percent in the lsat 24 hours.
While analysts are still calling today’s crypto market fall as “correction”, crypto market is failing to build a momentum.
Experts say that crypto market is following a similar path to stock markets, and the odds of traders remaining bullish on cryptos is low.
“With the US equities enduring another day of retracement, the crypto markets followed a similar path. With the high correlation between BTC and the S&P 500 index, the odds of traders remaining bullish on cryptocurrencies was lower,” Darshan Bathija, CEO and Co-Founder of crypto exchange Vauld, told FE Online.
Low risk appetite
One of the reasons behind falling crypto prices could be low risk apetitie among traders and investors, especially after the Terra (Luna) debacle.
“Bitcoin and most cryptocurrencies dipped on Wednesday. Even though May was tough for cryptos, BTC witnessed a brief bounce in the final week, but has drifted back to US$29,000 in the past 24 hours. This indicates a low-risk appetite among the buyers. It is yet to be seen how long the bearish trend will continue to affect the market,” Edul Patel Co-Founder & CEO of crypto investing platform Mudrex said.
What next for Bitcoin?
Trade analysts say that Bitcoin is continuing to move within a descending triangle pattern. It may witness an immediate support at $26,800. The next resistance for Bitcoin could be $40,000.
“Bitcoin corrected by nearly 6% yesterday dropping below the $30K level once again. BTC had made minor recovery in the last couple of days rallying above $32K but the momentum did not last long as the Dollar index regained some lost ground. The daily trend for Bitcoin continues to traverse within a descending triangle pattern,” analysts at WazirX Trade Desk shared in a note via email.
“The next resistance for BTC is expected at $40,000 and an immediate support is expected at $26,800. Bitcoin needs to break past the $40K level to witness any significant upward rally. Until then BTC may continue to consolidate between the $28K to $40K,” they added.