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Why Is Crypto Crashing and Will It Recover? Reasons, Recovery Factors
The world crypto market is in red today, with a decline of almost 2%. The market cap has fallen to $2.65 trillion, and trading volume increased to $59.47 billion over the last 24 hours, according to CoinMarketCap. Although there was this minor increase in trading volume, the overall mood remains unstable.
Bitcoin, the biggest digital asset, has also taken a hit. It’s now trading at around $81,468, down over 2.4% for the day. Just a few days ago, it was holding steady above $89,000, but a series of factors are now pulling the market down.
Source: CoinMarketCap
Why Is Crypto Crashing?
Several factors are taking the crypto sector down:
Bitcoin dipped below the critical support level of $82,000, triggering a wave of selling, according to CoinMarketCap data. The analysts say there has been a massive inflow of coins onto exchanges, particularly on March 25 and 28, which typically indicates that investors are intent on selling. Although there were some withdrawals, the price continues to drop — a sign as clear as day of bearish pressure.
According to Ali Martinez, to get back to an uptrend, Bitcoin has to break above $90,700 (short-term holder realized price) and $97,300 (three-month realized price).
Source: X
2. Trump’s Trade Tariff Tensions
Another factor adding anxiety to why is crypto crashing today is tariffs. US President Donald Trump is set to declare new retaliatory tariffs on April 2. The proposed tariffs will be imposed on nations such as China, EU, Japan, Canada, and South Korea. Markets do not take kindly to trade wars, and this declaration has already sent investors into a tizzy.
While Trump’s recent Bitcoin endorsement had raised some hopes, these new threats to trade have undone that optimism.
3. SIR.Trading Hack News
Another market jolt came from the DeFi sector. Ethereum-based platform SIR.trading lost all $355,000 in a recent hack. Cybercriminals breached a vulnerable contract and withdrew all the funds in the project. This has shaken trust in small DeFi platforms and raised fresh concerns about security in the space.
Will Crypto Recover or Crash Further?
Even with the current downtrend, not all news is bad.
Fear and Greed Index: Currently at 34 (Fear), it’s slightly better than last month’s Extreme Fear (20). A rise here could mean improving confidence in the market.
Japan’s New Regulations: Japan’s Financial Services Agency (FSA) plans to reclassify crypto assets as official financial products by 2026. This move will put tokens under insider trading laws and could lead to a more secure and trustworthy environment, attracting more users.
Upcoming Economic Events: Two major events are on the horizon. On April 2, the ADP Employment Report will be released, and on April 4, Fed Chair Jerome Powell will speak. Positive updates from these could help bring stability back to the market.
In short, while the current crash is driven by falling Bitcoin prices, political tension from Trump’s upcoming tariffs, and the SIR platform hack, there are still some signs of hope. If upcoming events go well and regulations become clearer, we could see a stronger and more stable market soon.
