The entire market capitalization of cryptocurrencies has decreased by 8.7% to $2.17 trillion over the last day, indicating that the market is currently down. The biggest cryptocurrency by market capitalization, Bitcoin, is spearheading the downturn after dropping 7.5% over the previous day to hover around $62,160 on April 14. In the same time frame, Ether, the second-largest cryptocurrency, dropped 10.6% to trade at $2,900. The recent 24-hour decline in the cryptocurrency market is a component of a larger correction that started on April 12. Tensions between Iran and Israel have been rising throughout this time due to Iran’s use of attack drones and missiles as payback for an Israeli assault in Syria.
In the hours leading up to and following the attack, traders who were willing to take a chance were extremely cautious. They moved their money out of risky markets, such as cryptocurrency, and into safer havens, such as the US dollar. As a result, since April 12, the value of the U.S. dollar—which gauges the strength of the currency relative to a basket of major international currencies—has increased by 0.79%. As of April 14, the cryptocurrency market is beginning to steadily rise, following Iran’s announcement that its military campaign against Israel was over. Many analysts, however, are optimistic that the market’s current downturn is “normal” and that its upward trajectory will soon continue. Approximately $2.5 billion worth of liquidations have occurred in the cryptocurrency market since April 12; in the past 24 hours alone, there have been liquidations totaling about $964 million. Remarkably, the number of protracted liquidations has greatly surpassed that of short liquidations.
The prevailing trend of extended liquidations implies that the cryptocurrency market was excessively leveraged in a positive manner, mainly because of the escalating excitement surrounding inflows of Bitcoin ETFs and the 2024 Bitcoin Halving.Due to abrupt market downturns brought on by the Iran-Israel crisis, traders who had borrowed money to take on larger positions in anticipation of market gains were forced to make large long liquidations. That made the losses in the cryptocurrency market worse.
The cryptocurrency market’s current downturn is a component of a corrective movement inside what seems to be a bull flag pattern. The bull flag’s upper trendline has been regularly broken by the market every time since March 13. Declines near the lower border of the flag have resulted from previous attempts to break above this level.By challenging this lower trendline once more as of April 14, the market may be preparing for a surge toward the higher trendline, which would see a spike from $2.15 trillion to over $2.5 trillion by the end of April. In the meanwhile, additional gains can occur if the market closes above the top trendline of the flag.
Bull flags are bullish continuation patterns that, according to technical analysis, resolve when the price breaks above the upper trendline and climbs to the height of the previous upswing. That places the cryptocurrency market on course to reach $3.1 trillion, a 40% increase from where it is now.