Causes of today's cryptocurrency decline:
1. Geopolitical tensions in the Middle East
Israel conducted airstrikes on targets in Iran, which heightened risk aversion and prompted investors to sell off digital assets.
The reaction was also visible in traditional markets – declines in stock indices and a rise in gold prices confirmed that investors are fleeing from risk.
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2. Massive liquidations of leveraged positions
In the last 24 hours, over $1.1 billion in long positions on futures contracts have been liquidated, leading to sharp price movements.
Strong declines in the market triggered another wave of liquidations, which exacerbated the downward pressure.
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3. Loss of hope for a Fed interest rate cut
Expectations for a rate cut in the US have been significantly curtailed following the latest inflation data, which dampened investor optimism and sparked a sell-off of risky assets.
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4. Breakdown of technical formation and market overheating
Technical indicators point to a “double top” formation for Bitcoin, signaling a possible short-term correction.
Bitcoin reached the upper limit of the Bollinger Bands channel and faced resistance, which triggered a drop towards the middle line.
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5. Expiry of options and profit-taking
Over $3.7 billion in options on Deribit expired, further intensifying volatility – some market participants began to close positions.
Investors also started to take profits after the gains of previous days.
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Summary:
The declines are the result of simultaneous actions of geopolitics (Israel-Iran conflict), macroeconomic factors (Fed, inflation), technical market weaknesses, and large liquidations and expirations of options.
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This phenomenon reflects typical “risk-off” behavior – investors are retreating from risky assets in favor of safer ones (e.g., gold).
