Yesterday, the cryptocurrency market experienced a sudden and sharp drop, with Bitcoin falling from $68,770 to $65,966, a daily drop of 4.6%, and Ethereum plummeting by 7.1%. According to statistics, this market turmoil caused a total of 138,987 people to be liquidated, with a total liquidation amount of up to $389 million. So, what are the reasons behind this market crash?
First, Tether, the largest stablecoin by market value, was investigated by Manhattan federal prosecutors for suspected money laundering and sanctions violations. The news quickly spread within the crypto market, causing widespread concern in the market. Although Tether quickly refuted this, calling it an unconfirmed claim and stating that it was actively cooperating with law enforcement agencies to prevent its stablecoin from being abused, the panic in the market has been difficult to calm down. This incident became the fuse for the crypto market to plummet, and investors chose to withdraw from the market to avoid potential losses.
In addition to the Tether investigation, the ongoing geopolitical tensions between Israel and Iran have also had a significant impact on the crypto market. Geopolitical uncertainty has made investors more cautious, and they have chosen to invest their funds in safer assets, leading to a decline in the crypto market. In addition, with the sharp rise in trading activities, the 24-hour trading volume soared 45.29% to $105.1 billion, which further exacerbated market volatility.
In terms of the Fear and Greed Index, the index is currently at a neutral level of 50, reflecting the uncertain atmosphere in the market. Although Bitcoin's dominance rose by 0.47% to 58.31%, indicating that Bitcoin has stronger market control, the performance of altcoins still shows volatility. The Altcoin Seasonality Index scored 30, indicating a lack of strong altcoin appeal in the near term. This also indirectly reflects investors' uncertainty and cautious attitude towards the market.
Specifically for Bitcoin, despite the rise in ETF inflows to $401.842 million, the price of Bitcoin still fell 1.26% to $66,862.02. This highlights that despite Bitcoin's continued appeal as a bastion for institutional investors, its price is still difficult to maintain stability in the current market environment. At the same time, 24-hour BTC trading volume increased by 41.91%, suggesting a wave of active trading, but failed to keep BTC above key levels. This also illustrates the volatility and uncertainty of the current market.
The leading altcoin Ethereum price also fell 1.47% to $2,456.03, with ETF outflows reaching $19.2 million. Other market darlings such as Solana and XRP also fell 4.28% and 2.59%, respectively. The broad decline in altcoins further exacerbated the market's cautious sentiment and possible temporary price resistance.
In summary, the crypto market crash is the result of multiple factors. Tether's investigation, geopolitical tensions, market uncertainty, and investors' cautious attitude are all important reasons for the market decline. In the future, with the further development of the market and the gradual improvement of regulatory policies, we expect the crypto market to develop more stably and healthily. BTC4390
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