Crypto Market Suffers Major Decline Amid Global Tensions; Experts Remain Optimistic
Summary:
The cryptocurrency market demonstrates a significant decline, with total market value dropping 8.7% to $2.17 trillion in the past 24 hours. The downturn is led by Bitcoin and Ethereum, and coincides with escalating tensions between Iran and Israel. As a result, risk-on traders started to move away from the volatile crypto market towards safer havens like the U.S. dollar. The situation pushed the crypto market to face liquidations worth nearly $2.5 billion. Despite the downturn, analysts remain optimistic, forecasting a soon-to-resume bullish trend.
In a significant blow, the value of the virtual currency market has fallen sharply, with an 8.7% decrease in total market value to $2.17 trillion in the last 24 hours. Bitcoin, the cryptocurrency with the highest market cap, spearheads this downturn, sliding 7.5% in the same timeframe, hovering around $62,160 as of April 14. Ethereum, the second in command, has made a steeper plunge of 10.6% to approximately $2,900.
The descent of the cryptocurrency market in the past day is part of a wider adjustment that kickstarted on April 12, coinciding with the heightening strain between Israel and Iran. This political tension was triggered by Iran’s retaliatory drone and missile strikes in response to an Israeli offensive in Syria. Such geo-political risks drove cautious investors to seek refuge in safe havens like the U.S. dollar, steering away from volatile markets like crypto.
As a result, the U.S. dollar, a measure of the American currency's might against major foreign currencies, enjoyed a jump of 0.79% since April 12. As of April 14, the crypto market is steadying its course, acting on Iran's announcement that its military activity against Israel has ended. Analysts are largely optimistic about the dips in the market, brushing them off as "normal" and forecasting their progression towards a bullish trend soon.
From April 12, the virtual currency market has faced liquidations worth nearly $2.5 billion. This includes about $964 million worth of liquidations in the past day. Long liquidations have outnumbered short liquidations extensively.
The balance tilting towards long liquidations implies an overleveraging of the crypto market spurred by an over-enthusiastic response to Bitcoin ETF inflows and the upcoming Bitcoin Halving 2024. Traders, looking to leverage borrowed capital for larger positions, were caught off guard by the sudden market downturns fueled by the Israel-Iran tensions, catalyzing massive long liquidations and adding to the crypto market's downfall.
Today's crypto market fall is also part of a readjustment process within what is perceived to be a bull flag pattern. Since March 13, repeated efforts to cross above the higher trendline of the bull flag have been unsuccessful. Previous attempts have led to drops towards the lower boundary of the flag.
As it stands on April 14, the market is yet again testing this low trendline, hinting towards a possible rebound towards the higher trendline — a leap from $2.15 trillion to above $2.5 trillion by the close of April. Further growth could ensue if the market goes beyond the flag’s higher trendline.
Bull flags, per technical analysis norms, are positive-driven patterns that are confirmed when the price bypasses the higher trendline, rising equal to the height of the preceding uptrend. This could potentially position the crypto market towards a whopping $3.1 trillion, a huge 40% gain from the current position.
The content provided in this article is not to be considered as investment guidance or recommendations. Investments and trading moves come with their inherent risks, and readers are urged to pursue individual research while making decisions.
Published At
4/14/2024 3:33:11 PM
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