Recently, the cryptocurrency market has been truly distressing, with the overall market declining, causing many people to panic. The reasons are as follows.

1. Huge pressure from the macroeconomy

The Federal Reserve's policy has always been like a mysterious bomb 💣. Although there are signs that core inflation in the U.S. is cooling down a bit, the Trump administration's increase in import tariffs has caused supply chain costs to soar, making the market extremely concerned about a rebound in inflation. Additionally, the expectations for the Fed's interest rates have been volatile, and the uncertainty of policies has caused risk assets (including our beloved cryptocurrencies) to wilt in the short term. Moreover, U.S. tech stocks have also been underperforming recently, with Bitcoin showing a stronger correlation to Nasdaq; when tech stocks falter, the crypto market suffers as well. The decline in stock prices of crypto-related companies like MicroStrategy and Coinbase has further shattered market confidence.

2. Regulatory policies are unpredictable

Although Trump appointed crypto-friendly individuals to the SEC, the market still feels unstable. The SEC's scrutiny of cryptocurrency exchanges is becoming increasingly strict, causing investors to feel anxious, with compliance risks looming like dark clouds overhead. Capital inflows have plummeted from $134 billion to $58 billion, and institutional investors have become extremely cautious. The review of state-level Bitcoin-related legislation in the U.S. has also not gone smoothly, with many proposals being rejected, and the divergence between the Trump administration and state-level policies has greatly undermined confidence in the passage of Bitcoin legislation, as the probability of interest rate cuts continues to decrease.

3. Market sentiment is extremely fearful

Previously, when the market was euphoric, the open interest in derivatives piled up high, and leverage was played excessively. Now, with market fluctuations, these leveraged positions have collapsed like a house of cards, triggering a technical sell-off as Bitcoin breaks key support levels, causing the market value of Ethereum, Solana, and others to plummet. In February, the net outflow of funds from Bitcoin spot ETFs was severe, with institutional investors pessimistic about short-term price trends. As for Ethereum, its expansion has hit a snag, and upgrades have not been smooth. Solana is being hit hard by the sluggish meme coin market and large-scale token unlocks. Coupled with hacks on platforms like Bybit and Infini, investors are scared and hurriedly sell off, causing panic sentiment to spread wildly throughout the market.

The recent decline in the cryptocurrency market is the result of multiple factors such as macroeconomic conditions, regulatory policies, and market sentiment.#加密市场回调 #加密货币 #ETH质押退出动态观察