Why Crypto Market Is Falling Today? Reasons Behind Crypto Crash

Why Crypto Market Is Falling Today Despite Altcoin Price Rally: Detail

The global cryptocurrency arena is witnessing a notable downturn as the overall market cap now stands at $2.87T, marking a 2.46% decrease over the last day. Meanwhile, trading volume has seen a 9.82% increase to reach $160.16B over the past 24 hours. With stablecoins making up a significant share of this volume—$150.6B or 94.03%—analysts are scrutinizing the factors contributing to the ongoing crypto market crash.

Crypto Market Crash: Key Reasons Behind the Downturn 

• Spot Bitcoin ETF Outflows: U.S. spot Bitcoin ETFs have experienced significant outflows for the seventh consecutive day, with nearly $2.99 billion withdrawn in the past week. Notably, BlackRock’s IBIT registered its largest single-day withdrawal since its launch. On February 26, 12 spot Bitcoin ETFs saw a combined net outflow of $754.53 million, intensifying bearish sentiment.

• Bitcoin's Oversold Condition: Bitcoin has broken out of its long-term channel, showing a bearish divergence on the Relative Strength Index (RSI) on the weekly chart. 

Source: X

Historically, such a pattern has preceded prolonged bearish phases, suggesting that current trends could be a precursor to further price declines. With traders’ realized loss margin nearing historical buy zones, the conditions raise the question Why is crypto crashing and more specifically, Why Bitcoin crash.

• Macroeconomic and Geopolitical Pressures: The market is also reeling from macroeconomic concerns such as the Trump trade war. Following former President Donald Trump’s announcement of a 25% tariff on the European Union, global markets, including the S&P 500, experienced a $500 billion drop in market value. Bitcoin, a typically volatile asset, dipped below $84,000 for the first time since November 2023, reflecting broader economic uncertainties.

• Sentiment Indicators: The fear and greed index crypto has plunged to 10—a level not seen since June 2022—indicating extreme fear among investors. Historically, such a sentiment has opened buying opportunities, but the current environment remains highly cautious.

Will Crypto Market Go Up?

Despite the prevailing downturn, some indicators suggest potential for recovery. A surge in altcoin values offers a promising sign for those asking, will crypto market go up today:

• Altcoin Price Surge: Tokens such as Pi Coin price are on the rise, with Pi Coin binance listing contributing to heightened investor interest. Similarly, Kaito Crypto price has surged by 33.69% intraday, and MyShell Coin price (or SHELL coin price) has experienced a notable boost, rising by 34.23% in a day and 60% over the week.

• Historical Cycle Patterns: Analysts are drawing comparisons between Bitcoin’s current trajectory and its performance during the 2015-2018 cycle. 

Source: X

This comparison raises expectations for further price growth before a market top is reached.

In summary, while significant challenges such as ETF outflows, oversold conditions, geopolitical pressures, and an extremely low fear and greed index crypto weigh on market sentiment, the recent altcoin rallies and historical trends provide a glimpse of potential recovery. Observers are keenly watching the interplay of these factors to determine whether the crypto market will rebound soon.