The cryptocurrency market is facing a significant correction, with Bitcoin, Ethereum, Ripple, and Dogecoin all experiencing substantial declines. What has caused this drop?
The cryptocurrency market is experiencing a significant downturn, with major tokens like Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and Ripple (XRP) all seeing substantial declines. The sharp drop in cryptocurrency prices has raised questions among investors and analysts about the reasons for the market crash.
It is noteworthy that today's drop in cryptocurrency prices may be attributed to two main factors: President Donald Trump's recent criticism of China on Truth Social, accusing China of violating trade agreements with the U.S., and the increasing likelihood that the Federal Reserve will not lower interest rates.
Cryptocurrency market crash: Bitcoin and altcoins struggle to survive
The global cryptocurrency market has seen a significant decline today, evaporating about $186 billion from yesterday's peak. As of the time of writing, the total market capitalization is $3.24 trillion, down 2.79% in the past 24 hours. Major cryptocurrencies have all reported losses, with Dogecoin experiencing the largest drop among the top ten cryptocurrencies.
According to CoinMarketCap data, Bitcoin is currently trading at $103,587, down 2.38% for the day, down 4.3% for the week, and trading volume has also decreased by 3.4%, to $56.34 billion.
Meanwhile, Ethereum's trading price is $2,513, down 4.91% in the past 24 hours. XRP and BNB have also seen significant declines of 3.9% and 3.03%, respectively, over the past day. XRP's trading price is $2.12, while BNB's trading price is $653.50. Dogecoin has dropped nearly 10% in the past 24 hours, currently trading at $0.1884. It is noteworthy that the drop in cryptocurrency prices today marks a clear reversal of the recent bullish trend.
Key factors behind the decline in the cryptocurrency market
Today's drop in cryptocurrency prices primarily stems from multiple factors, including Trump's tariff policy and recent personal consumption expenditures (PCE) inflation data. Yesterday, President Donald Trump posted on Truth Social, accusing China of violating trade agreements with the U.S. His post stated: 'China has completely violated the agreement made with the U.S., which may not be surprising to some. You are a good person.'
These remarks have caused a huge stir in the cryptocurrency market and stock market. Although the price of Bitcoin briefly rose to $106,000 after the announcement, it quickly fell to $104,000 and is currently down to $103,000.
Furthermore, although the latest PCE report is favorable, it is not enough to change market sentiment. This makes the speculation of a rate cut by the Federal Reserve in June very low. Polymarket predicts that it is almost certain that there will be no rate cut on June 18, with a probability of a rate cut as high as 96%.
Additionally, a large number of options expiring has exacerbated the market's predicament. On Wednesday, $12.1 billion in Bitcoin options and $2.13 billion in ETH options expired, prompting traders to rebalance their portfolios and causing market volatility.
