Why Is Crypto Crashing Today?
The crypto market is in freefall, losing over $400 billion in just 24 hours. Major players like Bitcoin, Ethereum, XRP, and Dogecoin have all taken heavy hits, some falling by nearly 20%.But what’s behind this sudden crash? A mix of global events and shifting market dynamics are shaking things up, and the fallout is being felt across the board. Let’s take a closer look at what’s causing this turmoil.Trade War Sparks Market PanicOne of the main reasons behind the market drop is the recent trade war triggered by U.S. President Donald Trump Donald Trump Donald Trump is an American former president politician, businessman, and media personality, who served as the 45th president of the U.S. between 2017 to 2021. Trump earned a Bachelor of science in economics from the University of Pennsylvania in 1968. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a family separation policy. Trump has remained a prominent figure in the Republican Party and is considered a likely candidate for the 2024 presidential election President By declaring a national emergency under the 1977 International Emergency Economic Powers Act (IEEPA), Trump imposed heavy tariff rules—25% on Mexico and Canada, and 10% on Chinese imports.This move caused immediate panic, with fears of rising prices, inflation, and economic instability. U.S. stock indexes dropped sharply, pulling the crypto market down with them.Bitcoin Network Activity Slows DownAside from external economic factors, Bitcoin’s network activity has declined significantly. Data from CryptoQuant shows that the mempool is nearly empty. This means fewer transactions are taking place, which is unusual for Bitcoin.Additionally, Bitcoin transaction fees have fallen to just 1 sat/vB, signaling low demand for block space. This is the lowest level of activity recorded since March 2024.Crypto Liquidations SurgeThe market has also seen a wave of liquidations, with over $2.18 billion worth of crypto positions being wiped out in a day, affecting more than 715,000 traders.Long traders suffered the most, losing $1.85 billion, while short traders lost around $334 million. The largest single liquidation happened on Binance, where one trader lost $25.64 million in a single trade.Stronger U.S. Dollar Adds PressureAnother factor weighing down Bitcoin is the strengthening U.S. dollar. The U.S. Dollar Index (DXY) has surged to 108.50, while the 10-year Treasury yield has risen above 4.54%. Historically, Bitcoin moves in the opposite direction of the dollar and Treasury yields, meaning a stronger dollar often leads to lower BTC prices.Bitcoin Struggles to Hold Key Support LevelCurrently, Bitcoin is struggling to stay above $93,000. If it drops below the key support level of $90,000, analysts warn that further declines could follow. Meanwhile, the Crypto Fear & Greed Index has dropped to 38, shifting from Neutral to Fear.While the market is under pressure, Bitcoin’s future isn’t entirely bleak. If Bitcoin can break above $95,000, it may regain its bullish momentum. But for now, the market remains uncertain, and investors are watching closely to see what happens next.Never Miss a Beat in the Crypto World!Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more. Daily Get real-time crypto news, market insights, and blockchain updates. Weekly Stay updated with major trends, funding news, and price analysis. Monthly Receive a detailed report with market analysis and expert predictions.