The crypto market has broken through a key support level

Market overview

The crypto market has lost around 3.5%, falling to a market capitalisation of $2.44 trillion and sharply breaking through the local support level seen in recent weeks. Technically, this is a worrying sign, as the market has fallen below the 50-day moving average, which could herald further sell-offs. The nearest potential stop is not before $2.30T. In a falling market, Stellar (+14.6%) and Basic Attention Token (+1.5%) stand out, but the third-ranked altcoin, BNB, has lost 3% over the past 24 hours. The worst performers among the most popular were Internet Computer (-9.6%), Zcash (-8.7%) and Dash (-8.7%).

Bitcoin has plummeted to $73K, a level not seen since mid-April. The bearish signal from the previous day, with the price falling below the 50-day moving average, is confirmed by market dynamics, which show that selling pressure on the leading cryptocurrency is intensifying. This suggests the broader bearish trend, represented by the declining 200-day moving average, is once again dominating the shorter-term upward momentum reflected by the 50-day MA. The outcome was not a foregone conclusion, but it seems the time for a long-term bull market has not yet come.

Ethereum has fallen below $2,000, a psychologically significant round figure. Having begun its decline in early May, the second-largest coin has wiped out its April gains and once again finds itself near a multi-year support line, from which ETH rebounded at the start of the year and in April last year. 

News background

An unknown trader sold BlackRock’s Bitcoin ETF shares on Tuesday for a massive $1.3 billion, Galaxy Digital notes. This led to a sharp drop in Bitcoin below $76,000. Outflows from US Bitcoin ETFs have continued for seven consecutive trading sessions and remain the main threat to the leading cryptocurrency, Wintermute notes.

Bitcoin has entered a high-risk zone amid mounting selling pressure and escalating international tensions, investment firm Swissblock notes. A further negative factor has been the decline in interest in spot Bitcoin ETFs.

“Ethereum evangelist” David Hoffman has sold all his holdings of the second-largest cryptocurrency and no longer expects it to grow significantly. In his view, ETH has failed to become the universal asset that many supporters of the project had hoped for. Meanwhile, the bulk of revenue has shifted to second-layer networks.

BitMine made the largest Ethereum purchase of the year last week. The company increased its holdings by 111,942 ETH, worth over $237 million. BitMine’s reserves exceeded 5.39 million ETH, that is 4.47% of the Ethereum supply. The company’s CEO, Tom Lee, described the fall of ETH below $2,200 as an ‘attractive opportunity’ to build up positions.

NEAR Protocol (NEAR), a layer-one blockchain positioning itself as the “blockchain for artificial intelligence”, has surged by 100% over the past month. The rally coincided with the announcement of a series of blockchain updates on privacy, cross-chain transfers, AI user data protection, and network scaling. 

Summary: The crypto market lost 3.5% and broke key support: BTC fell to $73K, and ETH fell below $2,000. The pressure is being exacerbated by outflows from ETFs and rising market risks.