A crypto crash is happening, with Bitcoin plunging below $115,000, and most altcoins like Ethereum (ETH), XRP, Cardano (ADA), and Hyperliquid (HYPE) going down by over 4%. This article explores some of the top reasons why the crypto market is going down today.
Crypto crash is happening as investors sell the news
One reason for the ongoing crypto crash is that investors are selling the Federal Reserve interest rate cut news.
The Federal Reserve decided to slash interest rates by 0.25% in the last meeting on Wednesday, with officials hinting that more cuts will be coming in the next meeting.
Stephen Miran, the newest Fed official who was appointed by Donald Trump, voted to cut interest rates by 0.50% in this meeting, a move that likely caught the attention of the president, who may appoint him as the Federal Reserve chair.
Federal Reserve interest rate cuts are bullish for risky assets like cryptocurrencies, which explains why most of them rose before and after the Federal Reserve slashed interest rates on Wednesday.
Now, however, investors are selling the news after the Federal Reserve slashed interest rates as they now wait for the next important catalyst. This is a common occurrence in the market, where investors sell assets after a major event.
Soaring liquidations in the crypto market
The crypto market is also soaring as investors react to the soaring liquidations in the crypto market.
CoinGlass data shows that liquidations jumped by almost 400% on Monday to over $631 million. Ethereum liquidations jumped to over $182 million, while Bitcoin ones soared to $69 million. Other top liquidations were coins like Dogecoin, Solana, XRP, and Aster.
Over 218,000 traders were liquidated on Monday, with the biggest one being a Bitcoin trader whose trades worth over $12 million were liquidated. Historically, crypto prices plunge when investors are being liquidated, as this forces them to sell their assets to cover.
Bitcoin price crash and risky pattern
Meanwhile, the crypto market is also plunging because Bitcoin has failed to move above $117,000 despite the recent interest rate cut in the United States and other countries.
Worse, as the chart above shows, Bitcoin price has been forming a huge rising wedge pattern on the weekly chart, which may lead to a prolonged bear market. If this happens, it means that most cryptocurrencies will drop as well because of the correlation that happens between Bitcoin and the crypto market.
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