Until today, the crypto market was doing well—indeed, bullishly—despite many concerns. The market stabilized after a period of recovery last month and the US employment rate data. The US government added 272,000 jobs in May, far more than any forecasts or projections. However, a decreasing market was the result of continuous political changes as well as other factors. Let’s talk about the potential causes of the current decline in the cryptocurrency market in this blog.
Conditions of the Crypto Market Overall
According to the fear and greed index, the worldwide market capitalization has dropped in tandem with a greed decline. Due to the deterioration of individual cryptocurrencies, the market cap is currently at $2.47 trillion, down 2.82%. The heatmap of the cryptocurrency market is shown in red today, and almost all other cryptocurrencies are on a downward trend.
When the categories are examined separately, the market caps of Solana networks and meme currencies have decreased by 1.88% and 3.38%, respectively. More significantly, there was a substantial 5.5% loss in gaming cryptos, with AI tokens following closely behind with 3.16%. However, despite the market decline, the global trading volume increased by 70% to $83.34 billion.
Top Reasons for Today’s Decline in the Crypto Market
The outcome of the EU Parliament election must have had the largest effect on the cryptocurrency market. These findings have impacted crypto consumers’ opinions about the impending laws and talks in this sector. Economic reasons also became involved when the European Central Bank announced the 25 basis point rate decrease, which is excellent news. However, cryptocurrency prices may be impacted by economic growth.
The outcome of the Indian election has also affected the stock market’s performance, significantly impacting the cryptocurrency market. Investors are alarmed by the predictable but unsatisfactory results, leading to both market consolidation periods.
Finally, the bear flag pattern previously seen on the Bitcoin charts caused the price to decrease. Because of its dominance, Bitcoin significantly affects the performance of the cryptocurrency market. The dominance of Bitcoin has surpassed 54% and is now at a very high 54.2%. Not only has the price of Bitcoin dropped to $67,779, but so have the prices of other cryptocurrencies. It is encouraging that analysts do not anticipate a sustained decline in the cost of Bitcoin. However, as Ethereum is already having trouble staying in the black, any additional dip could drive the market considerably down and be unfavourable for investors.
