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 Resistance Rejection:
Many major cryptocurrencies like BTC and ETH, along with altcoins like $SUI, $DOGE, and $NEAR, recently reached long-term resistance areas on the 4-hour and daily charts. These areas acted as sell barriers, where large orders led to corrections. Breakout attempts failed, resulting in panicked exits from weak hands.
📉 2. Frantic Indicators:
Technical indicators such as RSI, MACD, and Stochastic across multiple time frames reflected overbought levels. In many cases, the RSI was above 70, and the price extended far from the moving averages, resulting in automatic and self-induced profit-taking.
⚠️ 3. Liquidity Withdrawal and Order Hunting:
This is a common strategy among institutions, where many market makers intentionally stir negative volatility to withdraw liquidity and flush out leveraged positions. This causes a cascading liquidation, creating sharp but temporary drops.
🌍 4. External Macro Factors:
Uncertainty surrounding inflation data, interest rate policy updates, or regulatory concerns in the U.S. or Asia can impact sentiment — especially when the market is technically extended.
📊 5. Volume Variation:
Despite the price rise over the past 48 hours, the volume in many altcoins 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 may be a healthy dip before continuation. Smart traders must wait for confirmation — not emotions.
Professional Tip:
True strength is tested during pullbacks. Watch the reaction at key moving averages and support areas. The next big move starts where fears end.
