A perfect storm of factors sent shockwaves through the crypto market, leading to a sharp downturn in Bitcoin's price. Here’s a breakdown of what’s happening.

1. Escalating U.S.-China Trade Tensions

The surprise announcement of potential 100%tariffs on Chinese tech exports spooked global markets, instantly souring the appetite for riskier assets like cryptocurrency.

2. Mass Liquidations of Leveraged Bets

As Bitcoin began to drop,it forced the mass liquidation of leveraged long bets. Essentially, a huge number of traders who had borrowed money to make bullish wagers were simultaneously forced to sell their positions, wiping out over $1.5 billion and creating a vicious downward cycle.

3. Signs of "Cycle Exhaustion"

Beneath the surface,there were already signs of exhaustion. On-chain data suggests bullish conviction was waning, and a lack of fresh cash from stablecoins and institutions made it hard for the price to sustain gains.

4. Institutional Demand is Cooling

Demand from institutional players appears to be softening.Corporate treasuries are buying less, and inflows into Bitcoin-related funds have weakened, removing a key source of market support.

5. Macroeconomic & Monetary Pressure

Finally,the broader backdrop of persistent inflation and uncertainty around interest rate cuts is reducing the appeal of risk assets. When safer investments offer better returns, money naturally flows away from crypto.