The crypto market is down today, with the total market capitalization falling by 2.75% to rest at $1.90 trillion on Feb. 21. This movement has increased Bitcoin (BTC) market dominance by 0.25% to 50.77% as a technical divergence points to deeper corrections.

Cryptocurrency market performance, 1-day chart. Source: Coin360

BTC price has traded sideways around $52,000 throughout the week and briefly rose to a new yearly high of $53,019 on Feb. 20.

Let’s explore the reasons why the crypto market is down today.

The total crypto market structure weakens

The total crypto market capitalization has been increasing since Jan. 22, rising 32% to reach a high of $1.954 trillion on Feb. 20. The value is now 4% below this peak, at $1.875 trillion at the time of writing.

The four-hour relative strength index (RSI) shows a bearish divergence from the price. A bearish divergence happens when the price of an asset records a series of higher highs while the trend-following RSI oscillator reaches lower highs, indicating a potential trend reversal.

This is the scenario currently playing out in the crypto market with price strength at 42 suggesting that the bears are currently in control of the market.

Total crypto market capitalization, four-hour chart. Source: TradingView

If the global market cap continues to fall, it can decrease by 5% and reach the 100-day exponential moving average of $1.8 trillion.

Futures liquidations drive the crypto market lower

The decline in the prices of major cryptocurrencies has led to a rush of liquidations across the derivatives market. Bullish traders appear to have been caught off guard, leading to a quick spat of long liquidations.

In the past 24 hours, over $149 million in long positions have been liquidated across the crypto market, with $110 million wiped out in the previous 12 hours.

Asset prices are negatively affected when long derivative positions are liquidated without buying pressure from trading volume.

Crypto market liquidations. Source: Coinglass

Over 61,874 traders were liquidated, with the largest single liquidation being Ether/USD on BitMex valued at $4.04 million.

Related: Here’s what happened in crypto today.

Different market cycle

The crypto market is facing a market cycle that is different from previous bull runs. This can be attributed to the launch of spot Bitcoin ETFs and given the netflows in these instruments, the current correction could be viewed by traders as an opportunity to accumulate more coins.

On Feb. 20, total daily trading volume across all the spot Bitcoin ETFs reached a multi-week high of $2.58 billion with BlackRock’s iShares Bitcoin ETF (IBIT) recording the highest volume at $623.89 million. Grayscale’s converted GBTC fund came in second place with $619.76 million in trading volume.

Market intelligence firm Santiment posted the following chart on X noting that spot Bitcoin ETFs continue to record daily highs in terms of inflows and trading volume.

Bitcoin ETFs volume. Source: Santiment

Santiment added,

“Amongst the 7 largest ETFs, there was a combined $6.94B in volume. Individual #alltimehighs included $FBTC, $BITB, $HODL, $ARKB, & $BTCO.”

Even with these inflows, retail investors appear to be absent in the market. In a Feb. 21 report on the Mainstream Adoption of Bitcoin ETFs, analyst Leon Yee argues that such “financial products that have features and risks that are more difficult for retail investors to understand.”

“Bitcoin ETFs will intensify competition between cryptocurrency exchanges and traditional exchanges offering Bitcoin ETFs, potentially leading to cannibalization,” the report added.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.