The reason for the collective plunge this morning has been found!!!
The collective plunge of cryptocurrencies this morning is the result of multiple adverse factors such as recent macroeconomic pressures, changes in institutional funds, and regulatory uncertainties continuing to ferment🔥🔥🔥
The uncertainty of Federal Reserve policies continues to exert pressure: Previously, Federal Reserve Chairman Powell emphasized that another rate cut in December is far from certain, and Governor Cook echoed this hawkish statement, directly suppressing market expectations for monetary policy easing. Moreover, cryptocurrency prices have always shown a negative correlation with Federal Reserve interest rates, and this ongoing policy uncertainty continues to put pressure on the cryptocurrency market, becoming an important macro inducement for the price plunge.
Outflow of institutional funds and loss of ETF funds: The U.S. spot Bitcoin ETF has recently seen a large-scale net outflow, which has eroded the funds available in the market to absorb selling pressure, amplifying price volatility. At the same time, in the past month, long-term holders in the cryptocurrency market have sold over 800,000 bitcoins, and the exit of institutions and long-term investors has further intensified market selling pressure, triggering the price plunge.
Stalled regulatory processes undermine market confidence: The previously pro-crypto U.S. "Digital Asset Market Clarity Act" has become stalled in the Senate Banking Committee due to government shutdown and bipartisan disagreements, and the bill is unlikely to be signed before 2026. The regulatory framework remains unclear for a long time, hindering institutional investors from entering the market, which has eroded market confidence and prompted panic selling by investors.
Linked with risk assets facing synchronized selling: Currently, the correlation between Bitcoin and the Nasdaq 100 Index and S&P 500 Index has reached 46% and 42%, respectively. Recent escalating trade tensions and issues like the U.S. government shutdown have led to a broad decline in risk assets, and cryptocurrencies have not exhibited safe-haven properties; instead, they have been sold off alongside tech stocks, driving the price further down this morning.
