Why Is the Crypto Market Down Today?

The total crypto market cap (TOTAL) and Bitcoin (BTC) both took a major hit today. The latter ended up sliding below the $105,000 support during the intra-day lows. The decline was the result of China imposing fresh bans on even holding cryptocurrencies. Optimism (OP) led the altcoins in the same regard, as it posted a 9.3% drop.

In the news today:-

• The SEC and Binance.US filed a joint motion to resolve their ongoing legal battle, marking a major breakthrough after months of negotiations. However, it may be too early to declare the proceedings fully resolved due to potential procedural hurdles.
• Webus International, a Nasdaq-listed Chinese AI company, plans to invest up to $300 million in an XRP reserve to enhance cross-border payments. The firm also aims to use XRP to support its broader blockchain development goals, potentially expanding on-chain solutions across multiple sectors.

The Crypto Market Dips

The total crypto market cap fell by $61 billion over the last 24 hours, reaching $3.30 trillion. This decline caused TOTAL to lose the key support level of $3.31 trillion, signaling increased short-term volatility.

The drop followed China’s renewed bans on cryptocurrency holdings, compounding previous mining and trading restrictions. Despite this, bearish pressure is expected to weaken soon, giving TOTAL a chance to regain the $3.31 trillion support level.

Total Crypto Market Cap Analysis. Source: TradingView

However, if panic selling intensifies, it could trigger large liquidations. This scenario might push the crypto market cap further down to $3.21 trillion, increasing risks for investors.

Bitcoin Falls Below $105,000

Bitcoin’s price dipped below the $105,000 support for the first time in ten days during today’s intra-day low. However, BTC has since rebounded slightly and is trading at $106,152, showing resilience amid recent volatility.

Currently trading under the $106,265 resistance, Bitcoin aims to reclaim this level as support. Doing so would enable a recovery and a renewed push toward the $110,000 resistance, signaling potential bullish momentum.

Bitcoin Price Analysis. Source: TradingView

While the broader market remains bullish, the risk of a decline exists. A failure to hold $105,000 support could expose Bitcoin to a drop toward $102,734, increasing downside pressure for investors.

Optimism Holds Above Key Support

Optimism took the largest hit among altcoins with a 9.3% drop, trading at $0.70. Despite this, OP remains strong above the crucial support level of $0.69, showing resilience amid recent market volatility.

The Parabolic SAR indicator, positioned above OP’s price, signals potential decline. This suggests OP could break below the $0.69 support, possibly falling to $0.63 in the coming days.

OP Price Analysis. Source: TradingView

However, if OP manages to bounce off $0.69 and gains stronger bullish momentum, it could recover and breach the $0.80 resistance. This would invalidate the current bearish outlook and signal renewed investor confidence.