Will the Crypto Market Crash Again? Here’s What the Data Says

The crypto market, which had briefly rebounded on September 10th, is now experiencing another steep dive. Investors were caught off guard as the release of the US Consumer Price Index (CPI) data and the opening of the US stock market triggered a sell-off across major cryptocurrencies like Bitcoin, Ethereum, and Solana.

This unexpected downturn has left many wondering what’s driving this sudden reversal and where the market is headed next. Join us as we reveal it all.

Crypto Market Reacts to CPI Data

According to CoinMarketCap, BTC, ETH, SOL, and DOGE have experienced price declines of 1.95%, 1.85%, 2.10%, and 2.35%, respectively, in the past few hours. This suggests that investors are not entirely optimistic about the latest CPI report.

While inflation has cooled to 2.5%, down from last month’s 3.0%, the market reaction indicates ongoing concerns among traders about future bitcoin price predictions and market behavior.

Why is Bitcoin Price Falling?

A major factor behind the market downturn is a significant Bitcoin sell-off by short-term holders and miners.

A well-known crypto analyst noted on X (formerly Twitter) that short-term Bitcoin holders took advantage of the recent price jump on September 10, selling nearly 14,816 BTC worth about $850 million. The analyst also pointed out that Bitcoin miners have sold off a substantial 30,000 BTC, valued at roughly $1.71 billion, over the past 72 hours.

Bitcoin Technical Analysis & Key Levels

From a technical standpoint, Bitcoin is looking bearish after breaking the previous day’s low and dropping below the $56,000 level. The 200 Exponential Moving Average (EMA), a key indicator used by traders to identify long-term trends, also points to a downward trend for Bitcoin.

Based on historical price movements, if BTC closes a daily candle below $56,000, it could fall further to $54,000 or lower if the bearish trend continues.

What On-Chain Metrics Reveal

On-chain metrics also support the bearish outlook. Coinglass’s BTC Long/Short ratio currently stands at 0.881, with values below 1 indicating bearish market sentiment.

Additionally, BTC’s futures open interest has dropped by 1.5% and continues to decline. Meanwhile, 53.14% of top Bitcoin traders are holding short positions, while 46.86% are holding long positions, showing that bears currently dominate the market and may drive further selling pressure.

Also Read: Altcoins to Watch Before Bitcoin Enters Q4

Do you believe the market will recover or continue to decline? Join the discussion.