The recent cryptocurrency market crash in early June 2024 can be attributed to several important factors. Here are the main reasons:

Regulatory concerns: Anticipation of negative regulatory decisions was one of the main reasons. In particular, concerns that the U.S. Securities and Exchange Commission (SEC) might reject or delay approval of a Bitcoin spot ETF application. Digital asset company Matrixport released a research report suggesting that the current SEC leadership might delay approval until the second quarter of 2024. The report was released before the market fell, causing investors to prepare for possible regulatory hurdles, which in turn triggered a wave of selling (Coinpedia Fintech News) (Mitrade).

Market liquidations: The market experienced massive liquidations, with approximately $600 million in cryptocurrency positions being forced to close due to margin calls and other automated trading mechanisms. This included $520 million in long positions and $30 million in short positions. The sudden sell-off triggered a domino effect, with the sharp price drop further leading to more liquidations, exacerbating the market's decline (Mitrade).

Macroeconomic factors: Broader economic uncertainty also played a role in the crash. Investor sentiment has been affected by concerns about interest rate policy and the global economic outlook, leading to a general risk-off mood. This shift has reduced inflows into riskier assets such as cryptocurrencies, further depressing prices​ (Coinpedia Fintech News)​​ (Mitrade)​.

Low sentiment: The market was already in a pessimistic mood, with widespread negative sentiment among investors. This sentiment was exacerbated by technical issues and the failure of major projects and exchanges, undermining confidence in market stability and future prospects​ (Mitrade)​.

These factors combined to lead to the sharp drop in cryptocurrency prices in early June 2024. The market's continued reaction to these issues and the direction of future regulatory and economic policies will be key in determining whether the market recovers or falls further. $BTC $ETH $BNB #BTCUSDT #BTCUSD #ETHUSDT