The cryptocurrency market is undergoing a significant downturn, affecting many major coins such as Bitcoin, Ethereum, and XRP. What has happened:
1. Monetary policy of the U.S. Federal Reserve (Fed):
• The Fed has announced that it will slow down the pace of interest rate cuts in 2025, with the federal funds rate decreasing to a range of 4.25% to 4.50%. This indicates a tightening financial outlook, putting pressure on risk assets such as cryptocurrencies.
2. Global liquidity decrease:
• The central banks' reduction of their balance sheets and volatility in the bond market have decreased global liquidity. Bitcoin, which is sensitive to liquidity, faces significant pressure in this context.
3. Negative investor sentiment:
• The Cryptocurrency Fear and Greed Index has dropped from an “extreme greed” level of 86 to a “greed” level of 72 in a short time, reflecting increasing unease among investors, leading to asset sell-offs.
4. Long position liquidations:
• In the past 24 hours, the market recorded a total liquidation of long positions amounting to $732 million, as investors betting on a bullish trend were forced to close their positions, increasing selling pressure.
5. Macroeconomic volatility:
• Global economic factors, such as the downturn in the Japanese economy and other markets, also affect the cryptocurrency market as investors seek safer investment channels.
These factors have combined to create strong selling pressure in the cryptocurrency market, leading to a decline in the value of many coins recently.
$BTC $ETH $XRP $WIF
