The cryptocurrency market is experiencing a significant drop today. The total market capitalization has fallen by more than 2.5%, which is a significant amount of money. The drop is part of a correction that began on January 31, when US President Donald Trump announced the imposition of tariffs on imports from certain countries.
The main factors contributing to this decline are:
Liquidation in the cryptocurrency market: The sell-off triggered a cascade of leveraged position closes, leading to the liquidation of over $250 million worth of cryptocurrency in the last 24 hours.
Investors are in risk-on mode ahead of US jobs data: Investors and traders are tense awaiting the release of US jobs data as the data could influence the Federal Reserve's stance on interest rates.
Weakening market technical indicators: Technical indicators point to further decline, which also contributes to the market decline.
Ethereum leads the market decline: Ethereum suffered the biggest losses, down 5% in the last 24 hours. Bitcoin also recorded moderate losses, down 1.3%. Other major cryptocurrencies such as Solana, Dogecoin, and Cardano also suffered significant declines.
Investors shift into risk mode ahead of US jobs data: The release of US jobs data could influence the Federal Reserve's stance on interest rates. A lower-than-expected jobs number could lead to a more dovish Fed policy, which could boost demand for riskier assets like stocks and Bitcoin.
Will the crypto market cancel the bull flag? From a technical perspective, the TOTAL index, or the combined market capitalization of all cryptocurrencies, is currently testing a support level at $3.11 trillion. If this support level is broken, it could lead to further market declines.
Overall, the cryptocurrency market decline today is the result of a combination of factors, including market liquidation, investor concerns about U.S. jobs data, and weakening market technical indicators.
