Why Crypto Market is Down Today? Key Factors Driving $319 Million Liquidation
The total cryptocurrency market cap plummeted by 7 percent in the last 24 hours, reaching approximately $2.17 trillion during the early Asian session on Wednesday, August 28. The decline in market value stems from a significant bearish sentiment surrounding Bitcoin (BTC) after it closed below crucial support levels on Tuesday.
Notably, this decline had a heavy impact on the altcoin industry, particularly Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE). Consequently, more than $319 million worth of crypto derivatives were liquidated, with over 90 percent specifically affecting long traders.
Top Reasons for the Crypto Market Decline Today
Rising Fear of Further Crypto Capitulation in September
Bitcoin Fear and Greed Index is 30. Fear
Current price: $59,519 pic.twitter.com/uJwGH0R7ZE— Bitcoin Fear and Greed Index (@BitcoinFear) August 28, 2024
As we near the end of August, the fear of more crypto capitulation in September has significantly heightened. Historical crypto data reveals that Bitcoin has performed poorly in August and September, especially following halving events.
As previously reported, short-term Bitcoin holders have sold over 33,000 BTC units in recent days.
Significant Cash Outflows from US Spot Bitcoin and Ether ETFs
🚨ARKB Sells 1717 #Bitcoin
Wow. Largest ever dump from Cathie’s Fund pic.twitter.com/zflahl06MZ
— Thomas | heyapollo.com (@thomas_fahrer) August 27, 2024
Despite substantial cash inflows to BlackRock’s IBIT since trading began, the notable cash outflows from Grayscale’s GBTC have weighed heavily on bullish sentiment. Market data confirms that US spot Bitcoin ETFs experienced a net cash outflow of around $127 million, primarily driven by ARK 21Shares Bitcoin ETF.
Furthermore, US spot Ether ETFs have now experienced eight consecutive cash outflows, with Grayscale’s ETHE leading the way. On Tuesday, US spot Ether ETFs recorded a net cash outflow of approximately $3.45 million, bringing the total outflow to date to around $482 million.
Ethereum Price Crash
One of the important things I look for in a trade is if it has a well-defined risk point where I can say “I am wrong” and cut my losses.$ETH is a well-defined short-side trade. Above 2830 or so the trade is wrong pic.twitter.com/Iox0NTARTk
— Peter Brandt (@PeterLBrandt) August 27, 2024
Despite anticipated interest rate cuts in the United States as early as next month, the crypto market has experienced low bullish sentiment. Popular analyst Peter Brandt believes that Ethereum’s price has confirmed a bearish outlook after consistently closing below the support/resistance level around $2,814.
Brandt argues that ETH price had been forming a reversal pattern characterized by a double top and a bearish divergence on the weekly Relative Strength Index (RSI).
Meanwhile, Bitcoin’s price is anticipated to continue consolidating in an inverted triangle, possibly until the fourth quarter when the bulls are expected to regain control.