Main catalysts for the decline
1. Diminished optimism regarding US interest rate cuts
Wholesale inflation data was higher than expected, reducing the likelihood of a Fed rate cut to 85% from 94% a week ago.
Ongoing inflation data around 3.1% kept the market in a cautious wait-and-see mode.
2. Coinciding with the decline of tech markets
Tech stocks, particularly driven by AI gains, recorded a notable decline, which also reflected on cryptocurrencies as risky assets.
3. Profit-taking and widespread liquidation of leveraged positions
After Bitcoin reached a new all-time high, many investors resorted to taking profits, causing the liquidation of leveraged speculative positions and a temporary price collapse.
4. US tariff policy and economic concerns
Announcement of new fees in the United States has led to Bitcoin falling below $115,200, and a wave of selling in the market.
5. Poor performance of fintech companies linked to cryptocurrencies
Shares of companies like Coinbase, Robinhood, and SoFi fell due to disappointing Coinbase earnings and a decline in enthusiasm for the sector.
6. Decreased investor confidence due to the White House's lack of cryptocurrency holdings
US Treasury Secretary's statement about no plans to increase the White House's Bitcoin reserves added more tension to the previous optimism.