Why Is the Crypto Market Down Today?

The total crypto market cap (TOTAL) and Bitcoin (BTC) are not actually down but simply bearing the consequences of the recent rally. As the overheated market cools down, it brings correction along with it, and the same is extending to the altcoins as well, evident in Pi Network (PI) price’s 8% drop today.

In the news today:-

• Coinbase will join the S&P 500 index on May 19, replacing Discover Financial Services following Capital One’s acquisition of Discover. This inclusion comes shortly after Coinbase’s $2.9 billion acquisition of crypto derivatives exchange Deribit, with a portion of the deal paid in Class A stock, potentially delaying finalization.
• Curve Finance’s website has reportedly been hacked, potentially due to a DNS hijack, affecting multiple DeFi projects. While Convex Finance and Resupply confirmed their platforms remain secure, disruptions continue due to issues with Curve’s data feeds until the domain is restored.

The Crypto Market Can Still Bounce Back

The total crypto market cap has decreased by $61 billion today, now standing at $3.21 trillion. Despite this drop, as the Parabolic SAR indicator is currently below the candlesticks, the market could stabilize and avoid significant losses, but a correction may still occur.

A recovery in the total market cap is expected, but a short-term decline to $3.16 trillion remains likely. If this level holds, the market could see a rebound. However, if this support is lost, the total crypto market cap could further decline to $3.09 trillion, signaling continued weakness.

Total Crypto Market Cap Analysis. Source: TradingView

If the market breaches $3.28 trillion and flips this level into support, a rise to $3.40 trillion becomes possible. This would invalidate the current bearish outlook and suggest a shift in momentum, allowing for further growth in the crypto market.

Bitcoin Is Cooling Down

Bitcoin’s price is currently at $101,870, maintaining its position above the critical $100,000 support level. Given the current market structure, a drop below this level seems unlikely. This indicates a strong support base that could provide stability for the cryptocurrency in the short term.

The Relative Strength Index (RSI) has fallen back from the overbought zone and is now in the bullish zone, signaling positive momentum for Bitcoin. If this bullish trend continues, Bitcoin could bounce off the $100,000 support and make its way towards $105,000.

Bitcoin Price Analysis. Source: TradingView

However, should the selling pressure increase, Bitcoin could lose its $100,000 support. A significant decline below this level could push Bitcoin’s price down below $98,000 to $95,761. This would indicate weakening market sentiment and challenge its recent recovery.

Pi Network Faces Pullback

PI is down by 8% today, marking it as one of the worst-performing tokens of the day. The larger loss came over the last 24 hours, reflecting increased market volatility and investor concerns.

PI surged by 48% during the intra-day rise on Monday, briefly breaching $1.64 before losing momentum and dropping to $1.02. If the $1.00 support is lost, the price could fall further to test levels at $0.87 or $0.78. This would signal a continued bearish trend for the altcoin.

PI Price Analysis. Source: TradingView

However, if PI can hold the $1.00 support, it may recover and rise towards $1.34, challenging the recent downtrend. A bounce off this support could signal a reversal, allowing the altcoin to regain its upward momentum and invalidate the current bearish outlook.