Why Is the Crypto Market Down Today?

The total crypto market cap (TOTAL) and Bitcoin (BTC) are seemingly cooling down despite the latter breaching $105,000. Altcoins are also experiencing this slight shift in momentum, with Arbitrum (ARB) leading the losses today.

In the news today:-

• Lido’s Ethereum staking protocol confirmed it remains secure after an attacker compromised an oracle, stealing 1.46 ETH. The breach prompted a DAO vote to rotate the oracle’s address, and Chorus One, the operator, has found no evidence of further compromise, calling the incident isolated.
• Ledger confirmed its Discord server is secure again after a moderator’s account was compromised on May 11, leading to scam links being posted. The attacker used moderator privileges to hinder users trying to report the breach, though the issue has since been addressed.

The Crypto Market Halts

The total crypto market cap is down by $43 billion, now standing at $3.28 trillion, holding above this crucial support level. After several days of gains, the market seems to be cooling down. This dip raises questions about the sustainability of the recent upward momentum.

TOTAL now faces a critical decision, as losing the $3.28 trillion support could lead to a drop to $3.16 trillion. A decline to this level may deter investors, creating further uncertainty and possibly triggering a broader market correction if the support fails to hold.

Total Crypto Market Cap Analysis. Source: TradingView

However, if the market bounces off the $3.28 trillion level, it could push the total crypto market cap towards $3.40 trillion, continuing the uptrend. Sustaining above this key support would signal continued strength and could encourage more positive market sentiment in the near term.

Bitcoin Crosses $105,000

Bitcoin is currently trading at $103,922, with an intraday high of $105,086. This marks the first time in the past three months that BTC has touched these levels. The price action suggests renewed interest but faces strong resistance near the $105,000 mark.

Despite recent gains, market conditions suggest Bitcoin may struggle to continue its upward movement. Given the current market conditions, Bitcoin could experience a pullback, potentially dropping to $100,000. This decline could be temporary if support levels hold, but Bitcoin remains vulnerable to fluctuations.

Bitcoin Price Analysis. Source: TradingView

If Bitcoin manages to flip $105,000 into support, it could pave the way for further price gains. Successfully breaching $106,265 would signal continued upward momentum, allowing Bitcoin to inch closer to its all-time high of $109,588. This would invalidate the bearish outlook and encourage a potential rally.

Arbitrum Falls Back Below $0.50

Arbitrum (ARB) experienced a 6% drop today, becoming the biggest loser among altcoins, which saw mostly positive price action. Despite the broader market gains, ARB struggled to maintain upward momentum, highlighting its vulnerability amid fluctuating investor sentiment.

Currently trading at $0.455, ARB missed the opportunity to secure $0.500 as support. The altcoin is now hovering just below $0.473. If the downtrend continues, Arbitrum could see its price dip further, potentially testing the support level at $0.427, which would intensify bearish pressure.

ARB Price Analysis. Source: TradingView

However, if ARB manages to breach the $0.473 resistance and flip it into support, it could signal a potential rally. A successful move beyond this point would push Arbitrum’s price to $0.510, invalidating the bearish outlook and potentially paving the way for further gains.