Today's crypto price drop, including Bitcoin, is due to several main factors:
1. US Monetary Policy: The Federal Reserve (The Fed) delayed interest rate cuts until inflation reached its 2% target. This sparked concern in the market, as investors had previously expected interest rates to be cut soon. Uncertainty about interest rate policy often causes volatility in the crypto market, which is considered a risky asset.
2. Correlation with Equity Markets: The crypto market is currently heavily influenced by movements in the stock market, especially technology indices such as the NASDAQ. When tech stocks decline, crypto is also pressured. Fears of a recession due to tight monetary policy have also further weakened investor sentiment.
3. Mt. Gox and FTX Cash Out: Mt. Gox and FTX, two major crypto platforms, are planning to cash out a large amount of Bitcoin in the market. This additional supply increases selling pressure in the crypto market, adding to concerns that prices will continue to fall.
The combination of these factors makes the crypto market vulnerable to fluctuations, triggering today's significant decline.
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