Why is the cryptocurrency market falling today?

The cryptocurrency market faced a sharp drop on May 10 and even today, as the total cryptocurrency market capitalization (TOTALCAP) as well as bitcoin and ether failed to rebound.

Assessing TOTALCAP and Bitcoin’s struggles

The entire cryptocurrency market capitalization represented by TOTALCAP has been on a downward trend since April 14, falling below the important threshold of $1.16 trillion. This level was confirmed as resistance twice, first on April 26 and again on May 6, indicating a bearish sentiment in the market. Generally speaking, a validation of resistance levels following such a breakdown leads to a more pronounced decline.

Despite the brief rally on May 10, the long wicks at either end of the candlestick chart suggest a lack of clear direction. If the market continues to fall, the next support area is expected to be around $1.03 trillion.

Fake sale rumors hamper Bitcoin’s recovery

At the time of writing, BTC is trading at $27,473. Just a day earlier, the cryptocurrency had experienced a sudden sell-off, dropping as low as $26,850 at one point amid baseless claims that the U.S. government was disposing of confiscated Bitcoin assets. The rumor was later debunked, but damage has already been done to the fragile crypto market.

In positive news for Bitcoin enthusiasts, on-chain transaction fees have been reduced significantly over the past 24 hours, after reaching levels that have previously caused widespread displeasure. Current data from Mempool.space suggests that the fee for the next block will be 47 satoshis per byte, or about $1.80.

Meanwhile, Ethereum, trading at $1,824, has gone through a period of consolidation marked by volatility that has yet to provide market participants with a clear directional bias.

After failing to surpass the $2.1K level, the price dropped to $1.8K and entered a consolidation phase. Ethereum now faces three key levels: the 100-day moving average at $1,748, the 200-day moving average at $1,546 as major support, and the $2.1K price area as major resistance.