The crypto market experienced a sudden crash on Tuesday, plunging the global crypto market capitalization by more than 4%, from $2.64 trillion to a low of $2.50 trillion. Bitcoin (BTC) and Ethereum (ETH) Prices fell 5% in a matter of hours, triggering a market-wide sell-off.
Altcoins including Solana (SOL), BNB, The weak market sentiment continues since the cryptocurrency market witnessed the highest growth ever recorded. options expiration. Analysts believe it is the pre-halving market correction similar to other pre-halving corrections seen historically, as CoinGape reported.
Experts reveal why the crypto market fell
QCP Capital revealed that the options market provided early signs of a sharp decline, particularly the downward bias in risk reversals. Bitcoin and Ethereum options volatility has remained high, and selling pressure has increased amid weak sentiment.
BTC price broke $70,000 and traded below $66,000 and ETH traded at lows of $3,320. However, the sudden drop was due to large liquidations on crypto exchanges with large number of retail investors, such as Binance, which saw how perpetual funding rates rose from up to 77% to a stable level.
This brings spot prices back to the $63,000 risk levels seen in mid-March. With a decrease in trading volumes indicating a further drop in prices.
โWhile criminal financing has been compressed, the rest of the term curve remains very high. โWill this be the movement that will lower the entire curve again?โ QCP Capital questioned.
homeport further questioned the bullish trend of the cryptocurrency market after today's intraday correction. He highlights that Bitcoin has struggled, with some arguing this is due to the typical pre-halving crash and others saying it is happening due to the reassessment of US interest rate expectations.
glass coin Data shows that more than $500 million was liquidated nationwide. crypto market in the midst of this strong correction. Of these, $414 million of long positions and $85 million of short positions were liquidated in the last 24 hours.
More than 139,000 traders were liquidated and the largest liquidation order occurred on the OKX crypto exchange when someone exchanged ETH for USD valued at $7.48 million.
10x Research revealed an urgent update to its clients that Bitcoin and Ethereum are breaking crucial support levels. Senior Analyst Markus Thielen, CEO of 10x Research, previously warned that Bitcoin price may rise if it remains above the $68,330 level. However, the critical level was exceeded and the market failed to recover the price level.
He added that โsome growth and inflation data were also stronger, which could lead to a reassessment of interest rate cut expectations. โCryptocurrencies could be quicker to recognize this than other asset classes.โ
Will Bitcoin price recover?
Analysts and the market were already aware of the key level and that is what caused a free fall in cryptocurrency prices.
On Monday, crypto analyst Ali Martinez He again warned investors about the critical support level at $68,300, emphasizing that a breakout could trigger a downward spiral towards the $65,250 to $63,150 range. In particular, this range, where 760,000 wallets contain 520,000 BTC, presents a significant psychological threshold for Bitcoin's trajectory.
BTC price is still preparing to reach $100,000 in this bull market. Bitcoin closed up 64% in the first quarter of the last three years, Kaiko reported. Also, Bitcoin Spot ETF Inflows are expected to recover soon from the low inflows.
Macro factors affecting Bitcoin
On the macro front, the US Dollar Index (DXY) rises to 105, the highest level since mid-February, as traders anticipated key US economic indicators due this week. Traders reduced some bets as the Federal Reserve will ease monetary policy in June after a stronger-than-expected ISM manufacturing PMI.
Additionally, the 10-year US Treasury yield rises to 4.341%, its highest level since the beginning of the year, after good PCE data dampened optimism about the Federal Reserve's first rate cuts.
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The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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