The crypto market led by Bitcoin, began the week on a high note as the majority of the cryptocurrencies saw significant gains. However, it has failed to continue the momentum by mid-week with several tokens trading in the red zone, undergoing major price corrections.
The highly volatile nature of the crypto market might lead to panic selling by investors which will trigger a further downward movement. Participants have been wondering why the crypto market is down today, a few days leading to the anticipated Bitcoin halving. Let us take a look.
Global crypto market loses steam
CoinMarketCap, a cryptocurrency tracking platform, paints a clear picture of the nature of the crypto market today. According to its data, the global crypto market capitalization has dropped by 2.64% to $2.58 trillion in the last 24 hours. Additionally, its trading volume has dropped to $90.21B, representing a 7.81% decrease over the last day.
Cryptocurrencies in the top 10 list including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), BNB, and Dogecoin (DOGE) have only witnessed a slight price dip within the observed period, however, trending tokens like Dogwifhat (WIF) and Wormhole (W) have recorded massive losses of 15% and 14% respectively in the last 24 hours. As a result, the global memecoin market cap has dropped by 5% to $59.8 billion.
Similarly, the market cap and trade volume of the Solana ecosystem have now dropped by 2.25% and 3.52%, respectively. Stablecoins have also been impacted by the general decline in the cryptocurrency market, as their market cap has dropped by 0.01% and their trading volume has dropped by 0.67%.
Factors affecting the crypto market drop today
Besides the fact that the crypto market is naturally volatile, several factors could be attributed to the drop today.
Pre-halving correction
As the Bitcoin halving approaches, the market has been faced with mixed reactions. Bitcoin halving is an event that occurs every four years, cutting the reward for miners in half. This helps to reduce the amount of new BTC in circulation as the production decreases. Several expert analysts have predicted a price correction before the event which is scheduled to happen on April 18. This might continue until after the halving when the price of BTC is anticipated to skyrocket above $80k.
General market sentiment
Market sentiment refers to the emotions of investors in the crypto community. Measured on a scale of 1-100 by the crypto fear & greed index, the metric has shifted from point 80 to 78 in the last 24 hours. Even though the shift is not very significant, it still underscores a change in investors’ emotions.
In the cryptocurrency market, this indicates heightened selling pressure as investors choose to sell their holdings rather than purchase or hold onto them.
Crypto liquidation
Roughly 99,403 cryptocurrency traders have fallen victim to liquidity in the past day, according to stats from Coinglass. Bybit alone accounts for the $8.38 million in liquidations out of the $274.74 million overall liquidation data. This liquidation mostly affected top cryptocurrencies like Solana (SOL), Ethereum (ETH), and Bitcoin (BTC).
In conclusion, the crypto market slide recorded today, April 10 is mostly caused by factors including market sentiment, crypto liquidation, and pre-halving correction. Hopefully, the market will bounce back as we approach the highly anticipated BTC halving.
