Why is the crypto market down today?
The cryptocurrency market took a hit today, with the total market capitalization dropping by around 4% to about $3.3 trillion on Dec. 19.
This sudden plunge has left many investors scratching their heads, trying to understand the core catalysts behind this downturn and whether more losses are on the horizon.
Let’s look closer at the factors driving the crypto market down today.
Massive liquidations across the derivatives market accompanied this downturn in the crypto market
Risk-off sentiment pushed the crypto market down
The ongoing correction in the crypto market mirrors the weakness witnessed in US equities. The S&P 500 dropped by 0.4% to close the day
This performance highlights the impact of interest rate cuts on the valuation of the largest companies listed on stock exchanges in the United States
According to data from CME Group’s FedWatch Tool, the odds of the Fed keeping interest rates unchanged are now standing at 4.6% at the time of writing, against 95.4% for a 0.25% rate cut.
Meanwhile, CPI, PPI, and PCE inflation are all back on the rise as the labor market weakens.
TOTAL’s bearish divergence
Today’s drop in the crypto market is preceded by a growing bearish divergence between its price and the relative strength index (RSI).
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