Cryptocurrency prices, including Bitcoin and altcoins, continue to decline, causing concern among investors. The main factors behind this drop are economic decisions, the stock market's status, and technical signals.
State of the Cryptocurrency Market
Bitcoin fell below the critical support level of $89,220, reaching an intraday low of around $86,000. The altcoin Jasmy Coin dropped to $0.01683, its lowest level since Nov. 5. Pepe and Dogecoin also declined by over 8%, while the combined market capitalization of all meme coins fell below $60 billion.
US Tariffs and Their Impact
The first reason contributing to the market decline was the reaction to former President Donald Trump's commitment to imposing tariffs on Canadian and Mexican goods starting in March. These tariffs were postponed by a month for negotiations focused on drugs and immigration. Expectations of higher import costs and possible inflation growth are putting pressure on the Federal Reserve.
Sell Signals and Technical Analysis
The third reason is technical indicators. Bitcoin flashed a sell signal on the daily chart. It formed a double-top pattern at $108,438 in December and January and has now broken below the neckline at $89,136, confirming a bearish outlook. Continued sell-off could push Bitcoin toward the next key support level at $73,725.
The current correction in the cryptocurrency market is associated with a combination of economic factors, stock conditions, and technical analysis. Despite this, there remains a chance of a false breakdown and possible recovery, similar to what happened in January.
