Why Is the Crypto Market Down Today?

Jan 05,2023
Why Is the Crypto Market Down Today?

The total crypto market cap (TOTALCAP) and the Bitcoin (BTC) price have both broken down from key horizontal levels, while Luna Classic (LUNC) was also rejected by resistance.

Over the past 24 hours, there has been a slew of news in the crypto market. Several wallets associated with Alameda Research have withdrawn more than 90 Ethereum (ETH). It’s not certain if this is someone from within Alameda or if this is the beginning of the liquidation process.

Investors also sued Gemini after failing to register its Gemini Earn product as a security. Finally, Midas Investment became the next domino to fall in the FTX bankruptcy. The platform focused on DeFi yields and announced that it was closing after considerable losses.

Crypto Market Cap Breaks Down

The total cryptocurrency market cap (TOTALCAP) had been increasing above an ascending support line since Dec. 19. After three unsuccessful attempts at breaking out (red icons), it seemed that the crypto market cap finally escaped the clutches of the $770 billion resistance area on Dec. 27.

However, the breakout turned out to only be a deviation. The crypto market cap fell immediately afterward and broke down from the ascending support line the same day. The cryptocurrency market cap has reached the $755 billion support area, where a bounce could occur. The next support target will be found near $737 billion if a breakdown occurs.

On the other hand, reclaiming the $770 billion area would indicate that the trend is bullish instead. TOTALCAP/USDT Four-Hour Chart Source: TradingView

Bitcoin Breaks Down From Support

The BTC price had also been increasing above an ascending support line since Dec. 19.

Combined with the $16,930 resistance area, this created an ascending triangle, which is often considered a bullish pattern. As a result, an eventual breakout from it was the most likely scenario.

However, the BTC price broke down from the ascending support line on Dec. 27 and fell to the $16,590 horizontal support zone. It then broke down further the next day. In order for the trend to be bullish, the BTC price has to reclaim this support.

If the downward movement continues, the next support would be found at the wick lows near $16,300. BTC/USD Four-Hour Chart Source: TradingView

LUNC Faces Rejection

The Luna Classic (LUNC) price has been on a downward trend since being rejected by the $0.000185 resistance area on Dec. 27 (red icon). The dip led to a low of $0.000146 the next day.

Currently, the LUNC price is trading slightly above the $0.000146 support after a brief rebound. If the bounce continues, the LUNC price could retest the $0.000185 resistance area.

A breakdown below the $0.000146 support area could lead to long-term lows below $0.000125. LUNC/USDT Four-Hour Chart Source: TradingView

For BeInCrypto’s latest crypto market analysis, click here.