Analyst: The slump in the crypto market today is caused by multiple factors, including expectations of a dollar rebound, net outflows of ETF funds, seasonal factors and so on

BTC Markets cryptocurrency analyst Rachael Lucas said, "The downturn in the cryptocurrency market today is not caused by a single factor, but seems to be the result of multiple factors working together. Technical indicators show that the US Dollar Index (DXY) is oversold on the daily chart, which could mean a possible rebound for the dollar and this usually puts downward pressure on risk assets like cryptocurrencies." Lucas added that seasonal factors may be related to market downturns. The "September effect" traditionally leads to poor market performance due to portfolio rebalancing, tax loss harvesting and increased caution ahead of U.S elections.

Analysts say that a large number of cryptocurrency liquidations reported in recent days have exacerbated these adverse factors. Glassnode data shows that within the past 24 hours, long positions worth more than $287 million were liquidated. Augustine Fan, Director of Insights at SOFA.org said: "Short-term volatility is driven by buying pressure as traders rush to buy downside protection (put options), because potential momentum remains weak due to short-term oversupply and lack of on-chain catalysts." Ethereum prices continue under pressure as spot Ethereum ETF reported continued net outflows with Monday marking its eighth consecutive day of outflows. Fan stated “Ethereum's main network still faces an identity crisis leading to poor performance from Ethereum ETF.” Independent market researcher Nick Ruck stated in a release: “The Ethereum Foundation has been criticized for selling Etherium for a budget of $100 million which will add more selling pressure making Etherium’s situation tougher than other cryptocurrencies.”

Lucas from BTC Markets predicts if Bitcoin continues trading below its 50-day moving average line - this key technical level on daily charts - then Bitcoin might fall down near about $56,000 soon. According to TradingView data, Bitcoin's 50-day moving average currently stands at $61,991.