The crypto market has been experiencing a downward trend in recent weeks, with bitcoin losing more than 15% of its value since the beginning of August. The leading cryptocurrency is currently trading at around $25950, after breaking below the key support level of $28000. What are the factors behind this crypto market crash and what are the possible scenarios for the BTC next move?
According to technical analysis, bitcoin has been in a distribution zone for a long time, facing strong resistance at $30000. The market failed to break above this level and started to decline, eventually breaking the support of $28000. This indicates a lack of buying pressure and a shift in market sentiment from bullish to bearish.
The next major support for bitcoin is at $24100, which could act as a potential bounce zone or a further breakdown point. If bitcoin falls below $24000, it could test the $22800 level, which is the low of the previous correction in December 2020.
However, technical analysis is not the only factor that influences the price of bitcoin and the crypto market. There are also fundamental and macroeconomic factors that affect the demand and supply of cryptocurrency.
Crypto Market Crash Reason
Another reason for the crypto crash is the lack of institutional adoption and investment in the crypto space. Despite the growing interest and awareness of cryptocurrency among the general public, there is still a lot of regulatory uncertainty and skepticism from the authorities and traditional financial institutions. This makes it difficult for institutional investors to enter the crypto market and provide liquidity and stability.
The volume in the crypto market has also decreased, indicating a lower demand and interest from traders and investors. Until there is more institutional involvement and innovation in the crypto sector, the market may struggle to recover and resume its bullish momentum.
However, there is still some hope for the crypto enthusiasts, as there are some positive developments that could boost the market sentiment and confidence. One of them is the application for a bitcoin spot ETF by several institutions such as BlackRock, Fidelity and WisdomTree.
A bitcoin spot ETF would allow investors to buy and sell bitcoin directly on a regulated exchange, without having to deal with custody and security issues. This would increase the accessibility and legitimacy of bitcoin and attract more institutional and retail investors to the crypto market.
The US Securities and Exchange Commission (SEC) has yet to approve any bitcoin ETF, but it has recently extended its review period for some of the applications, indicating that it is taking them seriously and may grant approval in the future.
Why Crypto Market is Down? BTC Next Move
- The crypto market is experiencing a downward trend, with bitcoin falling below $28000, its previous support level.
- The main reason for the decline is the technical analysis, which shows that bitcoin has failed to break the resistance of $30000, which was a distribution zone for a long time.
- The next major support for bitcoin is at $24100, and if it breaks, the price could drop to $22800, according to the technical analysis.
- Another reason for the crash is the lack of institutional funds entering the crypto market, which reduces the volume and liquidity of the market.
- The crypto market is waiting for the approval of bitcoin spot ETF by the SEC, which could trigger the next bull run if granted.
In conclusion, the price of bitcoin and the crypto market is determined by a combination of technical, fundamental and macroeconomic factors, which can change rapidly and unpredictably. The current trend is bearish, but it could reverse if there are positive developments or catalysts that boost the confidence and demand for cryptocurrencies.
Alternatively, it could continue to decline if there are more negative events or shocks that dampen the sentiment and supply of cryptocurrencies. As always, investors and traders should be cautious and informed when dealing with this volatile and risky market.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal or investment advice. Please do your own research before making any decisions. We are not liable for any financial losses incurred.
