While crypto market breakdowns may be unexpected and unpleasant, they are not random. There are actual catalysts behind each collapse. Here are five main reasons why the market crashes and how to stay smart throughout the chaos for Pakistani traders who are attempting to make sense of red candles. ๐๐ต๐ฐ
๐ Legal & Regulatory Update
A lot of what the market thinks is affected by the government. A global panic can be caused by a ban, a change in tax policy, or new rules from big countries like the U.S. or China. Pakistan's unclear crypto rules make things even less clear in the country.
๐ฎ Market Forecasts
Financial experts had seen possible downturns coming. One of Bitmex's owners, Arthur Hayes, said that the crypto market would hit its peak in March 2025 and then drop a lot. Robert Kiyosaki, author of "Rich Dad Poor Dad," also predicted a major financial crisis for 2025 and advised buyers to safeguard their funds by purchasing Bitcoin, gold, and silver.
๐ญ Market Manipulation Concerns
The sudden drop in the prices of cryptocurrencies made people think that the market might be being manipulated. Some investors thought that big players might have caused price drops on purpose to buy assets at lower prices. But leaders in the industry, such as Wintermute's CEO, said that the crash was mostly caused by macroeconomic factors. They stressed how digital assets are linked to global financial dynamics.
๐ Global Trade Conflicts and Tariffs
When President Donald Trump announced new tariffs in April 2025, especially against China, it made trade relations around the world worse. Because of this uncertainty, investors pulled their money out of riskier investments like cryptocurrencies. Bitcoin's price fell as much as 5.5%, hitting its lowest point since 2025. The prices of big crypto-related stocks also fell a lot.
๐ซExchange Failures
People lose trust in the market when an exchange like FTX goes down or is hacked. Keep your money safe only use platforms you can trust that have a lot of users.
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For More Info: https://osl.com/academy/article/crypto-crash-8-reasons-why-it-happens
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