why are Bitcoin and top altcoins tanking?

The recent crypto crash resumed today, Dec. 13, with Bitcoin and most altcoins being in the red and the market capitalization falling by over 2% in the last 24 hours.

Bitcoin (BTC) price dropped from this week’s high of $94,000 to $90,000. Some of the top laggards in the crypto market were tokens like The Graph, Story, Algorand, and Ethena, which fell by over 5%.

Crypto crash today coincides with stock market weakness

The ongoing crypto crash happened as investors embraced a risk-on sentiment in the market. For example, American equities continued their recent slump amid AI jitters following the mixed earnings reports by companies like Broadcom and Oracle.

The tech-heavy Nasdaq 100 Index dropped by 500 points, while the S&P 500 and Dow Jones fell by 70 and 210 points, respectively. 

Also, the closely-watched VIX Index rose by over 2.7% to $16.70, while bond yields jumped. The ten-year yield rose to 4.20%, while the 22-year spiked to 3.53% even after the Federal Reserve slashed rates by 0.25%.

Therefore, the crypto market crash is happening as investors move away from risky assets.

Bitcoin price risky patterns are sending jitters

Meanwhile, the Bitcoin price has formed a series of risky patterns that are sending jitters in the market. The chart above shows that the coin formed the risky death cross pattern in November this year. 

This pattern formed as the 50-day and 200-day moving averages crossed each other and is one of the most common bearish signs in technical analysis. Bitcoin also remains below the Supertrend and all moving averages. 

It has also formed a bearish flag pattern, meaning that it may have more downside, potentially to $75,000. Such a move would lead to more weakness in the crypto market.

Crypto futures open interest dropped

The crypto market tanked as the futures open interest dropped by over 1.34% in the last 4 hours to $133 million. Open interest, which is an important indicator of leverage deployed in the market, has been in a downward trajectory in the past few months. 

It has dropped from a peak of over $255 billion in October, when over 1.6 million were liquidated. In most cases, crypto prices drop when the open interest is falling.

The open interest drop coincided with volume, which tanked by 15% to $200 billion. That is a sign of weak demand in the crypto market. 

However, on the positive side, it is normal for the crypto market to experience low volume and open interest during the weekend.