Downturns in the crypto market can be attributed to several key factors:
1. Mass Liquidations: Over $732 million worth of long positions were liquidated in a single day. This caused a domino effect as traders betting on price increases were forced to sell, increasing market pressure and driving prices further down.
2. Profit Booking: Many investors chose to take profits after a prolonged rally, especially as technical indicators like the Relative Strength Index (RSI) signalled that Bitcoin and other assets were overbought.
3. Mining Activity: Bitcoin miners sold a significant amount of their reserves, capitalizing on recent price increases. This increased supply in the market also contributed to the decline.
4. External Criticism: Remarks from influential figures, such as JPMorgan CEO Jamie Dimon, who criticized cryptocurrencies during a Congressional hearing, created uncertainty and reduced investor confidence.
