Why is the Crypto Market Down Today?

Cryptocurrency prices slid lower on Monday as Bitcoin stalled below $28,000 resistance. The pullback follows a failed rally over the weekend that saw Bitcoin briefly reach $28,000 before meeting selling pressure.

At the time of writing, Bitcoin traded around $27,640, falling 1.5% over the past 24 hours. The overall crypto market cap declined nearly 1.8% to $1.09 trillion as traders took profits from the recent bounce.

The retreat from local highs aligns with bearish technical outlooks. Analyst Alejandro expects Bitcoin to revisit the $19,000 to $20,000 zone, which he identifies as a potential floor. But he cautions another capitulation wave could drive prices as low as $12,000 first.

Other experts highlight Bitcoin’s failure to overcome stiff overhead resistance around $28,000. Rekt Capital notes that the latest rejection creates a problematic lower high that keeps the cryptocurrency stuck in its downtrend.

Beyond technical headwinds, FTX founder Sam Bankman-Fried’s criminal trial beginning October 3rd may also be unnerving investors. The high-profile case could bring negative publicity and regulatory scrutiny back to the forefront.

Additionally, some traders likely took profits on long positions after yesterday’s price jumps. Bitcoin surging to briefly top $28,000 in days led opportunistic sellers to lock in gains.

The combination of hitting resistance, profit-taking, and external regulatory risks took the steam out of the rally. Looking ahead, clearing the recent lower highs is critical for Bitcoin to restore upside momentum in the near-term. Otherwise, technical and fundamental drags could lead to a retest of 2022 lows.

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Rene Peters
Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.