Three Key Reasons Behind the Crypto Crash
Cryptocurrency prices are crashing. Bitcoin, Jasmy, Pepe, and Dogecoin have all taken significant hits. Let’s explore the factors causing this market turmoil.
1. Trump Tariffs Stir Economic Worries
Former President Donald Trump announced 25% tariffs on Canadian and Mexican goods, set to start in March. The move aims to address drug policies and immigration. However, higher tariffs could lead to rising inflation and slower U.S. economic growth.
Investors fear that higher inflation will delay Federal Reserve interest rate cuts. The Fed plans to ease rates only when inflation nears its 2% target. Unfortunately, recent data shows inflation is moving further away from this goal, heightening market anxiety.
2. Stock Market Weakness Spills into Crypto
U.S. stock markets added fuel to the fire. The Nasdaq 100 fell by 0.55%, while the S&P 500 remained flat. Although the Dow edged up 0.36%, the tech sector faced pressure. Investors are cautious ahead of NVIDIA’s fourth-quarter earnings, which could shape market sentiment around artificial intelligence.
When traditional markets show uncertainty, crypto often mirrors the sentiment. As stock indices wavered, Bitcoin and altcoins followed suit.
3. Bitcoin Flashes Bearish Signals
Bitcoin, the crypto market leader, sent out alarming technical signals. It broke below the critical support level of $89,220, dipping to around $86,000. On the daily chart, a double-top pattern formed at $108,438 in December and January. The breach below the neckline at $89,136 confirmed a bearish outlook.
Further declines could push Bitcoin to $73,725, an 18% drop from current levels. Altcoins like Jasmy, Pepe, and Dogecoin are feeling the pressure too. JasmyCoin plunged nearly 10% to $0.01683, marking its lowest level since November. Meme coins as a group saw their market cap dip below $60 billion.
Hope on the Horizon?
Despite the current downturn, a rebound remains possible. Bitcoin experienced a similar false breakdown on January 13, which led to a strong recovery. Traders and investors are watching closely for signs of stabilization.
For now, caution dominates the market. With economic uncertainty and bearish technical patterns, cryptocurrencies may face more turbulence in the near term.
