The cryptocurrency market has been in free fall, with most cryptocurrencies falling by over 15% in the past week. Bitcoin recently fell to $85000, shaking investors' confidence and dragging down the entire market.
Total Market Value (USD) - TradingView
Why has the cryptocurrency market collapsed?
There are several main factors that have led to this sharp decline:
The Federal Reserve's Tight Monetary Policy
The quantitative tightening (QT) policy of the Federal Reserve indicates that interest rates are unlikely to be lowered in the short term, which reduces the attractiveness of risk assets such as cryptocurrencies. Adding uncertainty is whether the Donald Trump administration will implement the highly anticipated strategic Bitcoin reserve, which could boost the price of Bitcoin.
Stock market crash affects cryptocurrency
Last Friday, the S&P 500 fell nearly 2%, marking its worst performance in two months. Cryptocurrencies have always been associated with stock market trends, and this downturn has further intensified the selling pressure in the digital asset sector.
Bybit has been hacked, exacerbating panic
Recently, Bybit, one of the major cryptocurrency exchanges, has experienced a security vulnerability, increasing investor uncertainty. Due to traders remaining cautious and observing, the overall purchasing power of the market has weakened, making recovery more difficult.
The three major altcoins that rose against the market trend
Despite the overall market downturn, there are still some altcoins with skyrocketing values, proving that certain projects still have strong momentum. Here are the top three performing currencies:
PI (+70%) - The biggest winner in the past 24 hours, with PI rising 70% to $2.74. This impressive upward trend coincides with rumors of new developments within the Pi Network ecosystem.
IP (+25%) - Increased by 25% in the past day, currently trading at $7.07. Despite the overall bearish market outlook, investors still have high hopes for its potential.
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