Why The Crypto Market is Crashing

The crypto market is crashing due to regulations, economic pressure, investor panic, low liquidity, and declining institutional interest.

The cryptocurrency market has decreased by more than 11% over the past seven days.

In this article:

• Bitcoin-1.33%

Bitcoin Shows Resilience Amid Market Decline

The bitcoin market has dropped by more than 11% in the last seven days. The major effect for pessimistic investors came over the weekend and on Monday, with the introduction of US tariffs on Canada, Mexico, and China. Despite an early comeback, the market continued to slide, hitting a value of 3.15 trillion, a drop below the previous cycle low.

A similar trend emerged in March of last year, when the market endured a protracted and fairly worrisome sideways dip. The crypto market sentiment indicators precisely matched this atmosphere, indicating a return to panic by the end of the week.

Bitcoin is currently performing well. Although the top cryptocurrency has also decreased, it has done so at a slower rate than the general market, dropping little more than 6% over the past seven days. Bitcoin’s price has dropped below $97K and is currently trading below its 50-day moving average. Consolidation below this level suggests a potential interruption in the uptrend, with a drop to the 200-day moving average, which is near $80K, being regarded a probable objective.

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Arthur Hayes predicts that Bitcoin will return to the $70K-$75K area. According to the former BitMEX CEO, the decrease will be driven by the realization that the current US president’s policies are nearly identical to those of his predecessors. He argues that establishing a US Special Bitcoin Reserve (SBR) will be a “net negative” for the business as digital gold becomes a “political weapon.”

Ethereum’s percentage of the entire cryptocurrency market value has dropped to its lowest level in four years. JPMorgan stated that ETH will continue to face “intense competition” from Solana and Layer 2 (L2) alternatives with cheaper costs and greater performance.

If Ethereum stays $2500, it might “bounce to $4000 or even $6000,” says tech expert Ali Martinez. If the $2500 barrier is breached, the next objective is $1700. Martinez stated that capital continues to migrate from Bitcoin and Ethereum to stablecoins.

According to a JPMorgan poll of 4,200 of its global clients. 71% of institutional investors do not intend to trade cryptocurrencies by 2025.

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