Bitcoin Price Drops Below $56K: Reasons Behind Today’s Crypto Market Decline
The cryptocurrency market faced a setback on Sunday as Bitcoin experienced a 4% drop, erasing the gains made on Saturday and pushing the altcoins market back into bear territory. This decline, coupled with an increase in supply, set a bearish tone for the start of the week during early Asian trading hours on Monday.
Currently, Bitcoin is trading at $55,269, showing an intraday loss of 1.30% and hitting a low of $54,296. Altcoins also followed suit with long liquidations, leading to a decrease of 5% or more in the top cryptocurrencies like Ethereum, Solana, and Toncoin, which saw drops of 5.25%, 7.23%, and 5.45%, respectively. Meme coins such as DOGE, SHIB, and PEPE experienced significant declines of 8.08%, 7.64%, and 12.84%, respectively.
The market sentiment on Monday, commonly referred to as the “Monday Blues,” suggested a potential for a more substantial crash in the crypto market throughout the week. To gain a better understanding of the market dynamics, a detailed price analysis of the top cryptocurrencies was recommended.
Bitcoin’s price performance indicated a continued downward trend, with the cryptocurrency trading at $55,269, marking a nearly 5% drop in the last 24 hours after failing to sustain the recovery seen on Saturday. The bearish trend was further confirmed as BTC broke below the $56,000 level and formed a bearish engulfing candle on Sunday.
The market saw long liquidations totaling $111 million on Sunday and an additional $75 million in the early hours of Monday, reinforcing the bearish sentiment among traders. The decline in Bitcoin’s hashrate, reaching levels last observed in December 2022, hinted at potential major price movements, possibly signaling a market bottom or the onset of a bullish phase.
The ongoing Mt. Gox payout scheme, following the exchange’s collapse in 2014, raised concerns among investors about a potential supply dump. The distribution of approximately $2.71 billion in BTC to creditors could still impact the market, despite efforts to prevent a significant price drop.
Looking ahead, the crypto market is expected to continue facing bearish pressures, with Bitcoin potentially finding support at the $52,000 level. The possibility of a death cross between the 50-day and 200-day exponential moving averages looms, indicating further downside risks for Bitcoin and the broader altcoin market.
