Why is the crypto market down today?
The recent downturn in the cryptocurrency market is attributed to a routine correction in the ongoing bull market and the potential for delays in the approval of the Spot Bitcoin ETF.
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Recent days have witnessed a downturn in the cryptocurrency market, with prominent cryptocurrencies like Bitcoin (BTC) trading at $36,240 and Ethereum (ETH) at $2,012 as of Nov. 15. The market's net capitalization has decreased by over 6% to $1.32 trillion compared to its recent high of $1.41 trillion just two days ago.
Crypto market cap vs. BTC/USD and ETH/USD year-to-date returns chart. Source: TradingView
Several factors contribute to the crypto market's decline:
- Overbought Correction:
The market experienced a correction due to overbought conditions, as indicated by the daily relative strength index (RSI) crossing and staying above 70 for major cryptocurrencies. Overbought RSI signals tend to dampen buying demand, leading to pullbacks.
Crypto market cap daily performance chart. Source: TradingView
2. Fake XRP ETF Filing:
The decline coincides with the SEC's review of pending Spot Bitcoin ETF applications. The market anticipates potential delays, influenced by a fake BlackRock XRP trust filing that stirred price volatility in the XRP markets. This event could impact the SEC's perception of price manipulation in the crypto industry.
Spot Bitcoin ETF deadlines. Source: Bloomberg
3. Spot Bitcoin ETF Deadlines:
The SEC must decide on Spot Bitcoin ETF applications by Nov. 17 and Nov. 21. Traders anticipate potential delays, prompting profit-taking at multi-month highs.
4. Long Liquidations:
The market correction led to significant liquidations in the derivative market, totaling $307.67 million in the past 24 hours, with approximately $265 million from long positions. Liquidations without corresponding trading volume pressure negatively impact crypto prices.
Crypto liquidation heatmap. Source: Coinglass
While the current correction suggests a temporary downturn, it does not mark the end of the overall bullish trend. Technical analysis indicates that the market is within an upward trend, with potential support around the 0.236 Fibonacci level of $1.24 trillion. Stabilizing at this level increases the likelihood of retesting the upper trendline near $1.5 trillion.
Crypto market's weekly performance chart. Source: TradingView Conversely, a close below $1.24 trillion could put the market at risk of falling toward lower trendline support around $1 trillion, aligning with the 200-week exponential moving average (200-week EMA).
