Today, Dec. 23, a significant downturn is occurring in the crypto market, with Bitcoin and the majority of altcoins experiencing drops. The total market capitalization has decreased by 2.45%, amounting to $2.95 trillion.
Summary
- A significant crypto downturn is happening, affecting Bitcoin and most altcoins.
- This decline follows strong US GDP data indications.
- Bearish trends were observed as Bitcoin and Ethereum displayed negative patterns.
Bitcoin (BTC) has decreased by 2.1%, now priced at $87,300, while altcoins like Solana, Cardano, Chainlink, and Zcash have fallen by over 3%. Most of these cryptocurrencies remain in a bearish trend.
The reason for this crypto downturn is…
Investors appear cautious ahead of the Christmas holidays. Data from CoinGlass shows a 1.5% decline in futures open interest over the last 24 hours, now at $128 billion. Spot market volume has also dropped to $100 billion.
Following the release of robust U.S. macroeconomic data, Bitcoin and other cryptocurrencies experienced a surge. The Bureau of Economic Analysis reported a 4.3% economic growth in Q3, partly due to ongoing data center investments, exceeding the median forecast of 3.3%.
Additional information revealed that the country’s industrial and manufacturing output increased in November. Such figures suggest the Federal Reserve may not feel pressured to lower interest rates in the upcoming year, which is typically beneficial for cryptocurrencies.
This crypto downturn coincides with investors bracing for potential risks. Indicators of this include the rising value of the Swiss franc and gold, along with some major firms (e.g., Apollo Global Management) shifting toward cash to minimize risk exposure.
Bitcoin price has formed a precarious chart pattern
Another critical factor contributing to the current crypto downturn is the formation of bearish patterns in Bitcoin and Ethereum on both daily and weekly charts.
As illustrated in the chart above, Bitcoin is creating a bearish pennant pattern, a common continuation formation. This pattern is characterized by a vertical trendline and a symmetrical triangle.
Bitcoin has also formed a death cross, which occurs when the 50-day and 200-day moving averages intersect, further confirming its bearish trend as it has fallen below the Supertrend indicator.
Consequently, these formations indicate a potential risk for Bitcoin to experience further declines in the short term. A bearish breakout could lead to more weakness across the wider crypto market.
