There’s rarely a single cause. The current drop is likely due to several overlapping factors:
FactorExplanationProfit‑taking / overbought conditionsAfter an extended rally, many traders/liquidity providers may be selling to lock in gains, triggering a correction.Liquidations in leveraged positionsCrypto markets often have heavy leverage. A small move downward can trigger cascades of forced liquidations, pushing prices further down. CryptoNews+2Lookonchain+2Options expiry / derivatives pressuresLarge amounts of Bitcoin and Ethereum options contracts are expiring. Market makers and large holders may be pushing price to “max pain” levels to benefit their positions. Lookonchain+1Macro / external factorsA strong U.S. dollar, hawkish interest rate signals, or weakness in broader risk assets can drag crypto down. Barron's+2TechWays+2Bearish sentiment & FUDNegative news, regulatory fears, or simply fear & uncertainty can amplify selling pressure. TechWays+1Whale / large‑holder movesBig holders may be disposing of or rebalancing, which puts downward pressure on price. CryptoDnes.bg+1
So yes — many of these are classic signals of a pullback or correction. The question is: how deep and lasting will it be?
Is it a “healthy” pullback, or something worse?
Here are a few things to watch to help differentiate:
Signs it might remain a pullback / healthy correction:
It finds and holds at key support zones (for BTC, ETH, etc.)
Volume decreases as the price drops (i.e. fewer people still selling)
No new strong negative macro or regulatory catalyst
A rebound / bounce from support soon
Signs of a deeper reversal:
Price breaks key support decisively with high volume
Continued downward momentum without meaningful bounces
New macro/regulatory shocks or adverse policy moves
Loss of confidence / more capitulation selling
Given how crypto behaves (with leverage, sentiment, etc.), pullbacks or “shakeouts” are quite common, especially after big moves up.