Why is the cryptocurrency market declining? — Technical Analysis
The recent decline in major digital assets is not random — it reflects converging technical, macroeconomic, and behavioral keys simultaneously.
🔻 1. Strong rejection of resistance:
Many major cryptocurrencies like $BTC and $ETH, as well as altcoins like $SUI, $DOGE, and $NEAR, have recently reached long-term resistance areas on the four-hour and daily charts. These areas have acted as sell barriers, where large orders led to corrections. Breakout attempts have failed, resulting in panic exits from weak hands.
📉 2. Frenzied indicators:
Technical indicators like RSI, MACD, and Stochastic across multiple time frames have reflected overbought levels. In many cases, RSI was above 70, and the price extended far from moving averages, leading to profit-taking automatically and self-reinforcing.
⚠️ 3. Liquidity withdrawal and stop hunting:
This is a common strategy for institutions, where many market makers intentionally create negative volatility to withdraw liquidity and flush out leveraged positions. This causes cascading liquidations, leading to sharp but temporary declines.
🌍 4. External macro factors:
Uncertainty surrounding inflation data, interest rate policy updates, or regulatory fears in the U.S. or Asia can affect sentiment — especially when the market is technically extended.
📊 5. Volume divergence:
Despite the price increase over the past 48 hours, the volume in many altcoins has failed to keep up. This classic bearish divergence indicated that the momentum was not sustainable and that a correction was imminent.
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Conclusion:
Corrections are a natural part of trending markets. What matters now is whether the key support levels will hold. If they do, this could be a healthy dip before continuation. Smart traders must wait for confirmation — not for emotions.
Professional tip:
True strength is tested during pullbacks. Watch for reactions at key moving averages and support areas. The next big move begins when fears subside.