The recent decline in the cryptocurrency market is attributed to several key factors. Notably, the launch of the TRUMP meme coin by President Donald Trump and the subsequent release of the $Melania coin by First Lady Melania Trump introduced significant volatility. These coins experienced a sharp price spike and then a sharp decline, leading to concerns about market manipulation and potential pump-and-dump schemes. Such events undermined investor confidence, contributing to the broader market decline.
In addition, the lack of an expected cryptocurrency policy in President Trump’s inaugural address led to market disappointment. Investors were expecting favorable regulatory announcements, and their absence triggered a sell-off, further depressing cryptocurrency prices.
Market analysts also point to technical factors that contributed to the decline. Bitcoin, for example, is forming a head and shoulders pattern, a technical indicator that often signals a reversal in a bearish trend. If Bitcoin breaks key support levels, it could lead to further declines, potentially dragging the broader market down.