After weeks of worrisome trading, things appear to have come to a head for the crypto markets on July 4 as the price of Bitcoin (BTC) and many other major coins and tokens fell precipitously.
The downturn proved, by press time, sufficient to see the total market capitalization of cryptocurrencies drop more than $130 billion within a single day from about $2.18 trillion to $2.05 trillion.
Total cryptocurrency market cap, 24-hour chart. Source: TradingView
Bitcoin, while risking a freefall as it struggles to hold on to a critical support level near $57,000, does not account for the entire drop as the total market cap of all other cryptocurrencies fell some $60 billion in 24 hours.
Total cryptocurrency market cap with BTC excluded, 24-hour chart. Source: TradingView
While the downturn became particularly stark in the early hours of July 4. bearish sentiment has been setting in for several weeks.
Why is the crypto market falling?
On the one hand, some analysts started forecasting that the meme coin ‘fiesta,’ which saw numerous such cryptocurrencies trade near all-time highs, is nearing its end. On the other, major cryptocurrencies have been trading sideways for months.
Meanwhile, Bitcoin, widely expected to aim for new highs after the April halving event, has instead traded in the range close to $67,000 and has repeatedly failed to recapture the new highs above $73,000 that it hit in March.
Pressure has generally been mounting in recent weeks. Solana (SOL) found itself caught in controversy once its stablecoin volume suddenly plummeted 90% in a day while simultaneously being targeted by rumors that a ‘huge case’ against it would soon be announced.
Additionally, investors became increasingly wary of Bitcoin as it came in danger of massive danger of facing significant selling pressure due to German and U.S. governments moving significant quantities of seized BTC while the failed cryptocurrency exchange Mt. Gox announced it would finally start repaying creditors in early July.
The repayments have become a particular cause of anxiety given that the number of bitcoins headed toward former customers is still not certain and could range from 65,000 to as much as 140,000, worth nearly $9 billion at the upper end.
All in all, the world’s premier cryptocurrency first lost its mostly stable level near $67,000 but found its footing near $61,000. Subsequently, it began dropping again after losing another crucial support level near $60,000 and entered what, at press time, looks like a possible freefall.
BTC 30-day price chart. Source: Finbold
Bitcoin price today, at the time of publication, stands at $56,723.
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