The crypto markets have experienced a significant downturn in the last 48 hours due to six main factors:

1.US Recession Fears: Recent job creation and unemployment data fell short of expectations, raising concerns about a potential recession. Additionally, the Federal Reserve did not cut interest rates last week, suggesting a possible rate cut in September, which many fear might be too late. This uncertainty led to a $2 trillion dip in equity markets.

2.Bank of Japan’s Interest Rate Hike: Japan increased its interest rates from 0.1% to 0.25% due to inflation concerns. This move has negatively impacted carry traders who borrow Japanese Yen at low rates to invest in higher-yielding assets. The rate hike has made these trades unprofitable, leading to liquidations and a stronger Yen, further reducing the profitability of reverse carry trades.

3.Jump Crypto Liquidating ETH: Rumors suggest that Jump Crypto is exiting the crypto business amid an investigation, leading to a significant sell-off of ETH over the past week, exacerbating the market decline.

4.Dwindling Chances for Pro-Crypto Trump: In July, the crypto market was buoyed by promises from Trump. However, following an assassination attempt, Joe Biden stepped down, and Kamala Harris has revitalized the Democratic base, making it harder for Trump to win the upcoming November elections.

5.Middle East Tensions: Escalating tensions between Iran and Israel, along with their proxies, have raised fears of a broader conflict. Similar tensions in April led to a dip in crypto markets, and there are concerns that this time the situation might escalate further.

6.Mt Gox Bitcoin Distribution: Nearly a decade after its hack and bankruptcy, Mt Gox is finally distributing some of the recovered Bitcoin, adding more selling pressure to the market.

Is there any other reason you think might be contributing to the market downturn? Let me know!