๐จ๐จ๐จ Why Market is Down? ๐จ
The crypto market is currently down due to several factors, including a mass deleveraging event, persistent outflows from $BTC ETFs, and a general risk-off sentiment among investors amid macroeconomic uncertainty. Bitcoin is trading around $85,417.73 , reflecting a decline of approximately 7% for the year.ย
Mass Deleveraging: A significant flash crash in early October triggered a record-setting $19 billion deleveraging event, forcing many investors to sell assets to meet margin calls, which created a sustained downward pressure on prices.
ETF Outflows: Bitcoin and Ethereum spot exchange-traded funds (ETFs) have experienced substantial net outflows, including over $1 billion in a two-day period recently, indicating reduced institutional demand and adding selling pressure to the market.
Macroeconomic Concerns: The crypto market has shown an increasing correlation with traditional equity markets and is being influenced by broader economic factors, such as concerns over AI stock valuations and uncertainty surrounding the Federal Reserve's interest rate decisions.
Bearish Sentiment: The current market sentiment is one of "Extreme Fear," as measured by the Crypto Fear & Greed Index, driven by high volatility and a lack of conviction among retail investors to "buy the dip" as in prior cycles.
"OG" Selling: Older, long-term holders have been selling massive amounts of BTC in recent weeks, contributing a flood of supply to the market.ย
