Why Is the Crypto Asset Market Down Today?

On April 1, the crypto asset market declined by 0.69%, losing $5.39 billion and bringing the total market capitalization down to $2.31 trillion, while energy costs due to the Strait of Hormuz crisis continue to influence market risk appetite.

Bitcoin fell 0.89% to $67,590, performing worse than the overall market while maintaining a dominance of 56.6%. Hyperliquid (HYPE), a top-20 layer-1 perpetual futures asset, dropped 3.3% that day and declined 10% over the past seven days, as bearish divergence threatens its bullish structure.

Today’s News:-

Caltech researchers show that fault-tolerant quantum computers could run Shor’s algorithm with only 10,000 qubits, down from previous estimates requiring one million qubits. This shortens the predicted time when quantum machines could threaten blockchain cryptography. Separately, Google Quantum AI mapped 6.7 million BTC on addresses vulnerable to quantum attacks.
The US Department of Justice has indicted 10 foreign nationals from four crypto companies for allegedly orchestrating scam schemes to artificially inflate trading volume and prices. Three defendants, including two CEOs, were arrested and extradited from Singapore.
President Trump revealed that the US could exit Iran within two to three weeks after achieving its nuclear goals, but the Strait of Hormuz remains closed with Brent prices staying above US$118 per barrel. Trump will deliver a public speech on Wednesday, a few days before the April 6 deadline for Iran to reopen the strait.
Hormuz Oil Shock Keeps Crypto Market Cap Under Pressure

Total crypto market capitalization traded at $2.31 trillion on April 1, down 0.69% from yesterday’s close. This decline extends the sideways movement pattern that has persisted since late March, as the closure of the Strait of Hormuz continues to raise energy costs and suppress risk appetite across all asset classes. Brent crude oil prices above US$118 per barrel have pushed national gasoline prices above US$4 per gallon, creating inflationary pressures that discourage investors from reallocating capital into speculative assets like crypto.

With Trump’s deadline for the Strait of Hormuz approaching on April 6 and no clear reopening plan yet, this uncertainty keeps total market cap below the resistance level of US$2.35 trillion. A recovery above US$2.35 trillion would be the first breakout signal from this range. Afterwards, US$2.55 trillion becomes the next key level to confirm a bullish structure.

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However, US$2.23 trillion has become the lower bound during this correction. A daily close below this level could open the door to a decline toward US$2.14 trillion and indicate that the previously contained correction has turned into a deeper sell-off.

Institutional Flow Weakness Pressures Overall Market

Bitcoin is trading around $67,590, down 0.89%, performing worse than the overall crypto market. With a dominance of 56.6%, Bitcoin’s direction heavily influences total market capitalization. Its current weakness is more restraining than any altcoin movement.

The Chaikin Money Flow indicator, representing institutional fund flow, is at -0.04 on the daily chart. This level has yet to return to zero, indicating more institutional funds are flowing out than in. This weakness aligns with the higher risk environment caused by rising energy prices. In other words, rising oil costs may force portfolio managers to reduce exposure to high-risk assets like crypto.

For Bitcoin’s price structure, the nearest support level is US$66,160. If the price breaks below, the correction could extend to US$63,470 and even toward the US$60,000 area, specifically US$60,050.

On the upside, a quick break above US$68,050 would be an early signal that buyers are ready to re-enter. A daily close above US$68,050 targets US$69,930. Conversely, if the price drops and closes below US$66,160, the next supports are at US$63,470 and US$60,050.

Bearish Divergence in Hyperliquid (HYPE) Poses Bullish Channel Risks

Hyperliquid is trading at $36.23, down 3.3% today and 10% over the past week. Still, HYPE has gained 12% in the monthly timeframe. The market weakness driven by energy factors increases selling pressure on HYPE, as a high-beta infrastructure perpetual futures token, making it more sensitive to risk appetite changes than large-cap defensive assets.

On the 12-hour chart, HYPE nearly touches the lower trendline of the bullish channel supporting its upward trend since late February. More concerning, the Relative Strength Index (RSI), a momentum oscillator, shows bearish divergence. Between March 2 and March 31, the price made higher highs while RSI formed lower highs. This is a common sign that upward momentum is weakening even though the price continues to rise.

This divergence adds pressure on the lower trendline. If HYPE drops below US$35.68, the structure could shift from bullish to neutral/bearish, risking even the US$29.68 level. If HYPE recovers back above US$39.87, selling pressure will ease, and sustained levels above US$46.64 will restore bullish sentiment. Currently, US$35.68 is the boundary between continuing the bullish channel and a potential breakdown toward US$29.68.