The crypto market continues to show negative dynamics, driven by several factors including profit-taking, falling prices of major cryptocurrencies, and concerns about trade and monetary policy.
Overall State of the Crypto Market
In the continued downturn, Bitcoin's price has dropped to $105,500, below its record high of $111,900 reached last week. Altcoins like PancakeSwap, Raydium, Ethena, and Arbitrum also experienced significant declines exceeding 10%.
Reasons for Price Decline
The decline in cryptocurrency prices has occurred amidst heightened liquidation: CoinGlass data shows that 24-hour liquidations rose by 125% to $709 million. Nearly 224,000 traders were liquidated with the largest loss amounting to nearly $13 million. Key factors include: 1. Anticipation of a downturn as June is traditionally unfavorable for the market. 2. Concerns regarding trade following court rulings on tariffs. 3. The Federal Reserve's intention to maintain interest rates at 4.50%.
Outlook and Future Predictions
Despite the current decline, technical and fundamental indicators suggest the bullish trend in the crypto market is set to continue. Specifically, the formation of a 'cup and handle' pattern and 'bullish flag' indicates a potential strong breakout. Additionally, rising demand for Bitcoin and decreasing supply on exchanges may contribute to price recovery.
Thus, the decline of the cryptocurrency market highlights the importance of analyzing various factors influencing its dynamics. We may be witnessing a temporary correction phase, yet potential signs of a bullish trend are still present.
