Why did cryptocurrencies drop today?

The digital markets witnessed a noticeable decline in the prices of most cryptocurrencies today, led by Bitcoin and Ethereum. This drop is attributed to several intertwined factors, the most prominent of which is the increasing concern over another interest rate hike by the U.S. Federal Reserve, prompting investors to reduce their exposure to high-risk assets like crypto.

Unencouraging inflation data and the absence of new positive market catalysts also contributed to the selling wave. Additionally, some centralized exchanges reported temporary technical issues, which heightened the tension among traders.

Psychological factors also play a role, as negative news and sharp fluctuations prompt some investors to sell quickly, contributing to the accelerated drop. It is important to remember that the cryptocurrency market is inherently highly volatile, and these corrections are a natural part of market movement.