Bitcoin's Decline: 5 Reasons Explaining the Rapid Collapse of the Cryptocurrency!
Bitcoin, the largest cryptocurrency globally, experienced a sharp decline over the past week, losing more than 10% of its value due to escalating trade tensions between the United States and the European Union, along with the aggressive economic policies of President Donald Trump.
During today’s trading, Bitcoin fell by 2.25% to $86,338.63, reflecting intense selling pressures that caused it to lose 20% of its value compared to its peak since Trump's inauguration in January. Here are the main reasons that led to this notable decline in the digital market:
Trump's trade policies are putting pressure on the cryptocurrency market.
After Trump's victory in the November 2024 elections, there was a wave of optimism in the cryptocurrency market, but this optimism quickly faded as his threats to impose tariffs on the European Union intensified. This led to a state of panic among investors, as they began withdrawing their funds from cryptocurrency ETFs, increasing the pressure on the market.
Inflation and uncertainty from the US Federal Reserve hinder Bitcoin's recovery.
The US Federal Reserve remains hesitant about lowering interest rates amid ongoing inflationary pressures, which is causing investors to exercise caution when investing in high-risk assets like cryptocurrencies. Additionally, intense institutional selling has affected market sentiment, raising questions about whether the current downturn is merely a temporary correction or the beginning of a deeper decline.
The hacking of the Bybit exchange exacerbates security concerns in the cryptocurrency market.
The challenges facing the cryptocurrency market are not limited to economic factors; security concerns have also increased following the hacking of the Bybit exchange last week, where hackers stole $1.5 billion in Ether. This event has reignited the debate about the security of cryptocurrency trading platforms and its potential impact on investor confidence in the market.
The controversy surrounding meme coins and the performance of Trump's cryptocurrencies increases volatility.
The pressures on the cryptocurrency market have increased due to the ongoing controversy surrounding Argentine President Javier Milei and his relationship with meme coins, leading to uncertainty among investors. Additionally, the poor performance of the cryptocurrencies launched by Trump and his wife Melania before his inauguration has raised further doubts about his true stance towards cryptocurrencies.
Bitcoin is facing a crucial test in the coming weeks.
Although Bitcoin's dominance in the market remains high (indicating some long-term confidence), there are warnings of a
strong liquidations and repeated crashes reflect a very fragile digital market. The coming weeks are expected to be crucial in determining Bitcoin's future and whether it can withstand these pressures or will experience further sharp declines.#CMEsolanaFutures #BTCRebundsBack #MemesNotSecurity #SHELLAirdropOnBinance #BinanceAlphaAlert