Why?

Because.

The cryptocurrency market has experienced a significant downturn over the last four days due to a combination of macroeconomic factors, market dynamics, and investor sentiment. Here's a breakdown of the key reasons behind this decline:

Economic Data and Interest Rates: Stronger-than-expected U.S. economic data has influenced investor expectations about future interest rate policies. The Federal Reserve's decision to potentially slow down rate cuts in 2025 has caused a shift in investor sentiment towards riskier assets like cryptocurrencies, leading to a sell-off. This was particularly evident after the Federal Open Market Committee (FOMC) announcements, where despite a rate cut, the indication of fewer future cuts led to a market downturn.







Market Liquidations: There have been substantial liquidations in the derivatives market, particularly affecting leveraged long positions. Over $600 million in long positions were liquidated, exacerbating the decline in cryptocurrency prices as investors scrambled to cover their losses.





Global Market Influence: The crypto market often correlates with broader financial markets. A downturn in traditional markets, including significant drops in indices like the Nikkei, has contributed to the crypto market's decline, as investors move away from high-risk assets during times of economic uncertainty.





Investor Sentiment: Panic and fear among investors have led to increased selling pressure. The combination of regulatory uncertainties, macroeconomic factors, and the psychological impact of seeing losses has led to a flight to safety, with investors pulling out of cryptocurrencies in favor of more stable investments.





Technical Analysis: From a technical perspective, cryptocurrencies like Bitcoin have breached significant support levels, leading to further sell-offs as these levels are tested. For instance, Bitcoin falling below $100,000 has been a notable trigger for additional declines.



This downturn reflects a complex interplay of economic