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Top Reasons Behind Today’s Crypto Crash Today and Market Instability
As per CoinMarketCap, the world crypto market cap has declined marginally to $2.68 trillion, registering a 0.58% fall in the past 24 hours. The trading volume is also down by 0.20% at $90.91 billion. Bitcoin (BTC) dominance stands at 61.91%, a fall of 0.21% from yesterday.
In spite of recent peaks, the price of Bitcoin has dropped from its all-time high of $84,000 and is currently trading at $83,608.44. The market appears unstable, and there are some major reasons why this current crypto crash is happening.
Main Reasons Behind the Crypto Crash Today
1. China Imposes 34% Tariff on US Goods: China recently imposed a 34% tariff on U.S. imports, such as technology that may affect blockchain operations. The action has stressed the global economy, particularly since the U.S. The stock market descended to 11-month lows. The Ministry of Finance website has shared the document.
Source: Ministry of Finance
Since it has a tendency to trend with legacy markets like the Nasdaq, most investors have pulled out, fearing further losses. This has slowed BTC’s performance and overall investor confidence.
2. Spot Bitcoin ETF Outflows: Another major cause behind the market crash is recent spot Bitcoin ETF outflows. On April 4, the ETFs saw a net outflow of $64.88 million. While the total cumulative inflow is still positive at $36.07 billion, the day-to-day outflows are alarming for investors.
Source: SoSoValue
Decreasing ETF inflows always reflect decreasing institutional investor interest, which affects overall market stability and confidence in the project.
3. Fear & Greed Index Still in Fear Zone: Investor sentiment is still low. The Fear & Greed Index stands at 30, which shows “Fear.” This indicates that most people are still fearful of the market, which tends to create more selling.
When fear dominates, prices usually fall even more, pushing the Token market further into red territory.
Will Crypto Recover? Here’s What Experts Say
Fed Chair Jerome Powell Speech: On April 4, Powell addressed the growing concerns over new tariffs introduced by President Trump. He warned that these tariffs could lead to higher inflation and slow down economic growth. Because of this uncertainty, the Fed is holding off on changing interest rates. This cautious approach has made some users feel uneasy, adding pressure to the crypto platforms as well.
Worldwide Reactions Bring Hope: In spite of the slump, all is not lost. Nations such as Argentina and the UK are already discussing with the U.S. decreasing or eliminating new Trump tariffs. Canada and Vietnam are also negotiating with U.S. representatives. If international trade tensions start to subside, it may serve to increase investor confidence. A favorable result from the negotiations may release a sign of relief for the sector and even ignite a bullish rally.
Conclusion
While the current crypto crash appears to be hard, it’s largely fueled by world events and investor panic. If the Federal Reserve and global leaders can lower trade tensions, the price of crypto can rebound. In the meantime, it’s a waiting game for most platform users and investors.
Also read:
China Announces 34% Tariff on US Goods, Intensifying Tariff War
