The most direct reasons for the recent sharp decline of Bitcoin and altcoins
1. The Federal Reserve's hawkish stance scared the market
Recently released news indicated that Federal Reserve officials have reiterated that "inflation is still high, and there may not be a rate cut," and even hinted at further rate hikes. The market panicked upon hearing this, resulting in a drop in US stocks, gold, and a heavy sell-off of high-risk assets like Bitcoin.
2. Panic from Mt. Gox sell-off
The exchange Mt. Gox, which was hacked a decade ago, has recently begun repaying its debts, and 150,000 BTC may flood the market (though they haven't sold yet). Large investors fear a sell-off and are fleeing to protect themselves.
3. Outflows from US ETFs, institutions are withdrawing
Bitcoin ETFs have seen net outflows for several days, indicating that large institutions are selling. When these investors leave, the market is sure to follow suit and decline.
4. Leverage liquidations and cascading failures
A slight drop → liquidation of leveraged long positions → forced liquidations → continued decline → more liquidations... a vicious cycle, especially in the futures market where blood is flowing.
Federal Reserve officials' statements (the most direct reason)
Mt. Gox repayment dynamics (psychological pressure)
In the short term, watch the Federal Reserve's attitude; if they continue to be hawkish, further declines may occur.
Don't rush to catch the bottom; wait until the panic has fully released before making any moves, especially avoid leverage!
(A common saying in the crypto world: Don't catch falling knives during a crash; any rebound is a chance to escape; think for yourself.)
