The cryptocurrency market had been on a consolidation phase and was anticipated to shift upwards, however, a series of fundamental events led to a different outcome. Bitcoin, the market leader, experienced a sudden drop below the crucial price point of $29,000, which is a bearish signal that could potentially foreshadow a broader downward trend in the cryptocurrency market. Why are cryptos crashing? Why is Bitcoin down today? Here are 3 reasons why cryptos are crashing.
Top 3 Reasons why Cryptos are Crashing
Reason 1: SEC’s Lawsuit against Richard Heart and his Crypto Companies
Renowned crypto influencer Richard Heart garnered considerable attention when he accurately predicted Bitcoin’s drop to $20,000 from its peak around $60,000. Heart is the force behind PulseChain, PulseX, and Hex – all significant names within the crypto landscape. Recently, these entities found themselves on the receiving end of a lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
The legal proceeding is bound to stretch over an extended period, casting a shadow of uncertainty over the crypto space. The negative sentiment stemming from this lawsuit has already caused a ripple effect across the market, with the average cryptocurrency prices experiencing a more than 5% drop since the news broke.
Reason 2: Breakdown of Market Consolidation
Typically, market consolidations are expected to perpetuate pre-existing trends. However, the cryptocurrency market took an unexpected turn following the shock of the SEC’s lawsuit. The result was a bearish pivot where prices plunged, failing to break through key resistance levels. The pressure exerted by this event significantly influenced the market’s overall sentiment, inhibiting the anticipated bullish breakout.
Reason 3: Profit-taking after the Recent Bullish Run
The cryptocurrency market had witnessed substantial gains in recent weeks, primarily driven by Ripple’s victory over the SEC. This victory stimulated the market and sparked significant uptrends, particularly in altcoins. Subsequently, traders and investors seized the opportunity to realize their profits, converting their digital assets into stablecoins. This sudden surge in selling activity often induces downward pressure on the prices, contributing to the market’s overall decline.
Top 3 Losers in the past 24 hours
- Compound (COMP): – 13 %
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- Optimism (OP): – 7 %