Why Is Crypto Price Down?

The decline in cryptocurrency prices at the start of 2024 follows a generally positive trajectory in 2023 for most cryptocurrencies. After bearing the brunt, most crypto tokens followed a path of recovery last year. However, cryptocurrency prices still lingered below their all-time highs. The journey of cryptocurrency prices took a roller-coaster ride in the first half of this year. The reasons behind this decline in crypto price down here.

KEY TAKEAWAYS

The crypto price down from left to right, comfortably within limited bounds and a smooth curve. The collapse of
FTX in 2022 shook the market, causing it to dip. This year has brought a fresh and positive outlook for major cryptocurrencies like Ethereum and Bitcoin, as they gradually trended upwards due to relaxed macroeconomic conditions and easing inflation.
However, market sentiment has shifted from fear to greed and then towards neutrality. This is inherent in the cryptocurrency market, which is highly volatile and unpredictable. Cryptocurrencies showed signs of stability last month, but inflation in the US and its impact on liquidity affected them.

HOW DOES CRYPTO PRICE UP AND DOWN?

How crypto price goes up and down? Cryptocurrency prices are subject to fluctuations due to a myriad of factors, including:

Market Demand and Supply: The fundamental principle of supply and demand mirrors other assets and influences crypto prices. If a cryptocurrency sees increased demand compared to limited supply, its price tends to rise. Conversely, higher supply than demand often leads to price falls.
Market Sentiment: Investor sentiment, molded by news, social media, market trends, and public perception, significantly shapes crypto prices. Positive events like regulatory advancements, institutional adoption, or technological upgrades typically raise prices, while negative news or FUD (Fear, Uncertainty, Doubt) tends to drive prices down.
Regulatory Changes: Government regulations and policy alterations globally can profoundly impact cryptocurrency prices. Announcements of bans or stringent regulations in significant markets often cause price declines, while favorable regulations tend to boost prices.
Technological Developments: Progress, innovations, or advancements in a cryptocurrency's technology or network affect its value. Enhancements in scalability, security, or utility positively influence prices.
Market Manipulation: The relatively small size of the crypto market compared to traditional finance makes it susceptible to manipulation. Whales, individuals, or entities with substantial holdings, can sway prices by conducting large buy or sell transactions.
Economic Factors: Global economic conditions, inflation, interest rates, and geopolitical events indirectly impact crypto prices. Economic instability might drive investors towards or away from cryptocurrencies as alternative investments.
Media Coverage: Positive or negative media attention significantly impacts cryptocurrency prices. Coverage by mainstream media, endorsements from influential figures, or negative narratives can alter investor behavior.
Network Security: Breaches, hacks, or vulnerabilities within a cryptocurrency's network diminish investor confidence, leading to price drops.

WHY DID CRYPTO PRICE DOWN?

Why crypto goes down? Because of the following factors:

TOTALCAP has revisited its support zone.

Why are crypto prices falling? The cryptocurrency market's overall capitalization has been on the rise, following an upward support trend line since October. Notably, it rebounded from this trend line on December 18 (indicated by the green icon) and initiated an upward trajectory.

This rebound marked a new yearly peak, hitting $1.68 trillion on December 28, signaling a breakthrough from a crucial resistance area at $1.60 trillion, which includes both a horizontal level and a Fib retracement.

However, there was a significant downturn in TOTALCAP's value yesterday, leading it back to the $1.60 trillion region. The market's direction, whether it rebounds or undergoes a breakdown, will likely set the tone for future trends.
A robust rebound could propel a 15% surge towards the next resistance level at $1.87 trillion. Conversely, a breakdown may trigger a 13% decline towards the 0.382 Fib retracement support, resting at $1.41 trillion. Additionally, this breakdown would entail a breach of the ascending support trend line.

Bitcoin has breached its support level

Similar to TOTALCAP, BTC's price has been on the rise, following an ascending support trend line since October. However, unlike TOTALCAP, Bitcoin's bounce on December 18 (marked by the green icon) didn't result in a new yearly high; instead, it established a lower high on December 22.

Subsequently, BTC has experienced a decline, breaking below the ascending support trend line on December 26. Despite attempts to recover the trend line, BTC formed another bearish candlestick (indicated by the red icon) yesterday.

Should the downward momentum persist, and Bitcoin closes below the $42,250 support zone, it could undergo an 11% decline, reaching the next support level at $37,800.

Despite this bearish outlook, a robust bounce that successfully reclaims the trend line could spark a 15% upward movement toward the next resistance at $48,600. Will is crypto down right now?

Arweave faced a decline following a double top pattern

Why have crypto prices dropped? The AR price surged notably in October, reaching a peak of $11.70 on December 16.

Subsequently, the price retreated, failing to sustain upward momentum and forming a double-top pattern (highlighted by red icons). This pattern is typically bearish, signaling potential downward movements.

Should the AR price break below $9, confirming the bearish pattern, it's likely to experience a decline towards the next support level at $7.10. This would signify a 25% decrease from the current price.

The information above has provided a comprehensive answer to why crypto price down. Hopefully, these analyses will help everyone understand the reasons and devise the most accurate operational methods.