The cryptocurrency market has experienced a significant downturn recently, with major assets like Bitcoin (BTC) and Ethereum (ETH) seeing notable declines. As of now, BTC is trading around $102,535, down approximately 2.4%, while ETH is at $2,452, down about 6.7% . Several factors are contributing to this decline

> Political Tensions Between Trump and Musk

A public feud between President Donald Trump and Elon Musk has unsettled investor sentiment. Trump's threats to terminate federal contracts with Musk's companies, including SpaceX and Starlink, have raised concerns about potential impacts on Musk's ventures, some of which are intertwined with the crypto market. This discord has particularly affected Dogecoin (DOGE), a cryptocurrency often associated with Musk, leading to a 20% drop in its value

> Mass Liquidations Due to Leverage

The recent price drops have triggered a cascade of liquidations in leveraged positions. Over $1 billion in crypto positions were liquidated in the past 24 hours, predominantly from long positions. This has exacerbated the downward pressure on prices, as forced sell-offs increase market supply

> Global Economic Concerns and Tariffs

New tariffs imposed by the U.S. on imports from Canada, Mexico, and China have heightened global economic uncertainties. These trade tensions have prompted investors to move away from riskier assets like cryptocurrencies, contributing to the market's decline

> Profit-Taking After Recent Highs

Bitcoin recently approached an all-time high of $112,000. Such peaks often lead investors to secure profits, resulting in sell-offs that can trigger broader market corrections

> Interest Rate Hikes by the Bank of Japan

The Bank of Japan's decision to raise interest rates has impacted global financial markets. Higher rates have made carry trades less attractive, leading to a withdrawal from higher-risk assets, including cryptocurrencies

> Weak U.S. Employment Data

Recent U.S. nonfarm payroll data showed only 114,000 jobs added, below expectations, and an increase in the unemployment rate to 4.3%. This has intensified fears of an economic slowdown, prompting investors to reassess their positions in volatile assets like cryptocurrencies