$BTC Why is crypto down today? Market sentiment has a role to play
Tether Dominance rose by 10.91% as the crypto market crashed, signifying that investors held more stablecoins.
• The market sentiment soured, and liquidity pockets attracted prices lower.
• Bitcoin and Ethereum faced rejections at their respective resistance zones.
On the 26th of August, the total crypto market capitalization dropped from $2.216 trillion to $2.041 trillion the next day. This was a $215.87 billion or 9.7% drop across the market.
Certain tokens were affected more than others.
In the past 24 hours, the market prices have already begun rebounding. Bitcoin [BTC] and Ethereum [ETH] were up 3.84% and 6.82% respectively. But what could explain why crypto is down since the 26th?
Market participant behavior
The Tether dominance chart measures Tether’s market capitalization as a share of the total crypto market cap. The chart above showed USDT.D rose by 10.91% from Monday, running into a resistance zone at 5.9%.
Since then, it has declined. The Tether dominance and crypto price movements are inversely related.
When USDT.D goes up it signifies more investors and market participants exchanging their crypto for Tether, implying a lack of confidence and a surge in sell pressure.
This has abated in recent hours and a price bounce was witnessed across the major altcoins and for Bitcoin.
The Tether exchange reserve has been trending higher since early August. It was an indication of rising buying power in the market.
However, it is hard to tell when the crypto market prices would begin to rally, but the metric showed that there is room for expansion.
Liquidity explains why crypto is down
