Oof, the deep freeze has hit the crypto market AGAIN! The recent bloodbath on Satoshi Street has affected all crypto assets, with Bitcoin dropping nearly 20% from its $70,000 high and many altcoins falling by 50% or more. This sharp decline is due to several factors converging to create a perfect storm of market troubles.

We seek to answer your major question, which is: why the decline?

Key Factors Behind the Crypto Sell-Off

Geo-Political Tensions

Geopolitical tensions are having a significant impact on the market, with rising conflicts affecting investor confidence. As these issues escalate, they create additional challenges for the cryptocurrency market, further destabilizing it.

Market in Recession Fear Grip

Fears of a recession are another crucial factor. Economic indicators suggest a potential downturn, leading investors to become more cautious and sell off various assets, including cryptocurrencies. The Sahm Rule Recession Indicator has surpassed the 0.50 threshold, historically indicating the beginning of a recession in the U.S. economy.

Global Impact of the Yen Unwind

The recent drop in the crypto market is partly due to the Bank of Japan’s decision to raise interest rates from 0% to 0.25%. This is the first rate hike in years, increasing the cost of maintaining leveraged investments funded by cheap yen. As a result, investors have fewer funds to invest in crypto assets, causing instability across financial markets.