The unstable and erratic cryptocurrency market is experiencing another wave of volatility. Notable cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have experienced a 3.76% and 3.03% decrease in value respectively. The overall worth of the global cryptocurrency market amounts to $2.37 trillion, representing a 4.28% drop within the past day. Trading volume has surged to $84.52 billion, signaling a significant surge in trading activity. Currently, Bitcoin holds a dominance of 53.42% in the market. This article delves into the reasons behind the current crypto market slump, investigating how multiple factors have contributed to this sudden and extensive decline.
Reasons Behind the Crypto Market Crash Today
Here’s a breakdown of the key reasons behind the sudden drop of the entire crypto market.
1. Geopolitical Tensions in the Middle East
Amidst heightened geopolitical conflicts in the Middle East, the crypto market is experiencing a downturn. The Israeli military’s recent attacks on 40 targets in Southern Lebanon have further fueled this uncertainty, causing many investors to shift their funds towards less risky assets.
2. Liquidation of Long Positions
The sudden decrease in Bitcoin and Ether prices caused many investors to sell off their previously bought positions, leading to a market-wide total of $102.22M in liquidations over the course of 12 hours, as reported by Coinglass. Of this amount, approximately $87.61M were long positions being closed, while $14.61M involved short positions being closed.
In the last 24 hours, approximately $211.97 million in cryptocurrency positions were forcedly closed due to market movements. Among those, around $37.83 million were Bitcoin long positions and $34.17 million were Ethereum positions. About 94,632 traders experienced these liquidations. The largest single liquidation order, worth $5.66 million, took place on OKX involving Ethereum-USD trading. This extensive liquidation event intensified the market’s downward trend.
3. Arrest of Samourai Wallet Founders
Two individuals, Keonne Rodriguez and William Hill, who are among the founders of Samourai Wallet cryptocurrency mixer, have been taken into custody by the US Justice Department on allegations of money laundering. The accusations against them include conspiring to launder money and running an unlicensed money transferring business. If convicted, Rodriguez could face a prison term of up to 20 years, while Hill risks five years in prison.
According to the Department of Justice, Samourai Wallet is accused of processing more than $2 billion worth of unlawful transactions and assisting in money laundering schemes, earning substantial fees for their services in the process.
The crypto community was taken aback by the news of the arrest, causing investors to feel apprehensive.
4. Post-Halving Volatility
In the past, after a Bitcoin halving, the crypto market has seen greater price fluctuations. The reasons behind this volatility include miners and investors pondering over the upcoming Bitcoin supply reduction and its effect on the coin’s value. Furthermore, traders frequently make guesses about future price trends following the halving event, causing increased market excitement.
The Bitcoin halving that took place on April 20th recently has increased the potential for price swings in the cryptocurrency market. With heightened expectations of market instability in the near term, investors are bracing themselves for a turbulent journey.
After the halving event, the increased market instability and uncertainty caused by heightened volatility played a role in the current price drop. Some investors expected brief price fluctuations post-halving, but external factors such as regulatory actions and geopolitical tensions significantly intensified the market’s volatility, resulting in a sharp decrease in prices.
According to Rekt Capital’s forecast, the upcoming bull market peak could be around 518 to 546 days following the halving event. This prediction introduces an additional degree of ambiguity to the cryptocurrency market.
#BTC
If history repeats…
Next Bull Market peak may occur 518-546 days after the Halving
That’s mid-September or mid-October 2025$BTC #Bitcoin #BitcoinHalving
— Rekt Capital (@rektcapital) April 24, 2024
Conclusion
The crypto market downturn we’re experiencing now is caused by several interconnected factors: regulatory moves, geopolitical conflicts, and post-halving price swings. Despite the market’s ability to bounce back from challenges, these events serve as a stark reminder of the risks involved in investing in cryptocurrencies. As the crypto industry develops further, it will be essential for investors to keep abreast of news and adjust their strategies accordingly.
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2024-04-25 09:54