The crypto market is experiencing a major sell-off, with total market value dropping to $2.66 trillion and down more than 6% in the last 24 hours. The main driver is global uncertainty around interest rates, with investors growing bearish after news of a new US Federal Reserve leadership appointment that raises fears policy could stay tighter for longer. When rates are expected to remain high, risky assets like crypto typically suffer as funds move into safer options, pushing both stocks and crypto lower in tandem. Over the past week, crypto prices have shown a strong link with US equities, illustrating how closely digital assets now react to traditional financial markets.
The decline was amplified by massive liquidations, as prices fell and leveraged traders were forced out of their positions. In the last three days, nearly $5 billion worth of leveraged long and short positions were liquidated, and automatic selling by exchanges increased selling pressure and accelerated the crash. Ethereum has been hit particularly hard, with institutional players reporting large unrealised losses that heightened fear around ETH and dragged down the wider altcoin market. As Ethereum weakened, confidence across the market dropped further, with major cryptocurrencies moving lower: Bitcoin around 13% lower, Ethereum about 25% lower, XRP near 22% lower, and Solana over 23% lower.
Market sentiment has turned extremely bearish, and the Fear and Greed Index sits at 18, indicating Extreme Fear. Many indicators show the market is oversold, suggesting prices may have fallen too fast in a short period. Looking ahead, the short-term outlook depends on whether Bitcoin can hold the $77,000 support level; a break below could lead to further downside. Investors also await signals from the US Federal Reserve, which could stabilize markets or trigger another wave of selling.
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