Numerous factors are contributing to the present downturn in the bitcoin market.
First, political instability has resulted from a public spat between Tesla CEO Elon Musk and President Donald Trump. Both individuals have a great deal of influence on Bitcoin sentiment, and investors are becoming concerned about possible regulatory repercussions as a result of their seeming dispute.
Second, there is a notable wave of leveraged long holdings being liquidated in the market. In the last day, more than $308 million worth of cryptocurrency long bets were liquidated, which led to a series of sell-offs, especially for Ethereum and Bitcoin.
Lastly, the pessimistic outlook is being fueled by macroeconomic issues. Investors are becoming less interested in risky assets like cryptocurrencies as a result of renewed concerns that the Federal Reserve would maintain interest rates higher for an extended period of time due to better-than-expected U.S. job statistics.
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