Why is Crypto Crashing: Bloodbath Continue or Will Crypto Recover?
Why is Crypto Crashing and Will it Recover as Bybit Hack Shakes Market The crypto market faced a significant downturn today, leaving investors wondering, Why is crypto crashing? The global crypto market cap dropped by 1.90% to $3.17 trillion, raising concerns across the community. A combination of events, including the Bybit hack, significant ETF outflows, and mass liquidations, triggered the market slump.Why is Crypto Crashing: Will the Struggle Continue? Bybit Hacked News Shakes the Crypto MarketOne of the main reasons why the crypto market is falling today is due to the shocking Bybit hack. The popular crypto exchange Bybit confirmed a major security breach on Friday, resulting in the theft of $1.4 billion worth of Ethereum (ETH) and stETH from its hot wallet. The stolen funds were quickly sold off on decentralized exchanges, causing panic among traders.Source: XBybit hacked news spread rapidly as CEO Ben Zhou confirmed the attack, explaining that hackers manipulated a planned transfer to gain control over a specific ETH cold wallet. Fortunately, other cold wallets remained secure, and withdrawals are now operating normally. The crypto hacked incident led to Ethereum dropping nearly 3% to $2,727, while Bitcoin slipped by 1% to $98,091.Spot ETF Outflows Add PressureAnother reason why crypto crash today is the significant ETF outflows. Both Bitcoin and Ethereum ETFs saw notable daily outflows, contributing to the market's instability.Bitcoin ETF outflow recorded a daily net outflow of $84.41 million, with a cumulative total net inflow of $39.53 billion.Ethereum ETF outflow stood at $8.92 million for the day, adding up to a cumulative inflow of $3.15 billion.These outflows suggest investors are taking profits or moving funds to safer assets amid market uncertainties, deepening the market's decline.Liquidations Amplify the Sell-OffMass liquidations further fueled the downturn, highlighting why the crypto market is down today. Over the past 24 hours, 169,736 traders were liquidated, amounting to $565.62 million in total liquidations. The largest single liquidation occurred on HTX, involving a BTC-USDT order worth $45.80 million.The high volume of liquidations, particularly in long positions, accelerated the price drops and added to the market's bearish sentiment.Fear and Greed Index Signals Investor CautionThe Fear and Greed Index Crypto also reflected the market's nervousness. The index shifted from Greed (55) to Neutral (49) in just one day, highlighting a sudden change in investor sentiment. This drop in confidence is one of the key reasons behind why crypto market is down today, as traders moved away from risky assets amid growing uncertainty.When investors turn cautious, market volatility often increases, leading to broader sell-offs and price declines.Market Reaction and Will Crypto Recover?Following the downturn, Bitcoin recorded a sharp decline of 1.83%, trading at $96,404.67 with a market cap of $1.91 trillion and a 24-hour volume of $49.42 billion. Ethereum also slipped to $2,682.07, down 2.36%, while XRP dropped 2.56% to $2.57.Despite the bearish trend, there are signs that the market could recover. The upcoming FOMC meeting on March 18-19, 2025, may offer some relief if the Federal Reserve hints at more accommodative monetary policies. Moreover, the expected ETF approval date for various altcoins, including XRP ETF, Litecoin ETF, and Dogecoin ETF, could boost investor confidence and spark a bullish rally. Recently, Brazil approved the XRP ETFs which is a positive sign for the crypto community. The crypto community remains hopeful, asking, Will crypto rise again? While short-term volatility may persist, the combination of positive regulatory developments and market recovery events could pave the way for a rebound.