Why Did Bitcoin and the Crypto Market Crash Today?

The global crypto market has experienced a sharp crash today April 13 with the majority of the tokens trading in the red zone. A look at the broad market looks like a bloodbath. Investors were already optimistic about the market recovery 24 hours ago when Bitcoin traded above $70k, but has now taken a nose dive.

This development has created tension among participants as investors hurriedly sell off their holdings across several crypto exchanges leaving members of the community with speculations about the cause of the fast decline. Consequently, the global crypto market cap has dropped by a significant 7% to $2.45 trillion in the last 24 hours. However, the total trading volume has witnessed an upsurge of 77% to $140.25 billion.

The confidence of investors has dropped drastically as seen in the crypto fear & greed index, a stat used to measure the sentiment of the crypto market. According to Alternative data, the metric now points to 72, representing a 6-point drop from yesterday’s 79. A slide from ‘extreme greed,’ to ‘greed.’

The global crypto market ends the week in the red

According to CoinMarketCap data, Bitcoin, the most popular cryptocurrency in the world has lost 4.7% of its value over the last day, now trading at $67,380. Additionally, its market cap has slid by almost 5% within the time to $1.32 trillion. The trading volume of BTC has witnessed a spike to $48.2 billion, signifying a 61.4% increase over the last day.

The price of Ethereum (ETH) has also suffered greater loss per data from the aforementioned tracker. In the last 24 hours, ETH has declined by 7.3% to trade at $3,259. What is more, its market cap has dropped by 8% to $391 billion. However, the activities involving ETH as measured in its trading volume have surged by 88% to $25.2 billion.

Other altcoins on the top ten list like Solana (SOL), XRP, and Dogecoin (DOGE) have lost 12.5%, 11.11%, and 13.13% of their values respectively. At the time of writing, they are changing hands at $151, $0.5, and $0.17 respectively.

Trending tokens like Ethena (ENA) and Dogwifhat (WIF) are not left out of the catastrophe. CoinMarketCap data shows that Ethena (ENA) is now trading at $1.30 which signifies a notable 10% decline in the last day. Similarly, memecoin Dogwifhat has dropped by a massive 21.86% within the observed time to trade at $2.67.

With these price updates, investors are wondering why the market took a sharp U-turn. Let us take a look.

Why did the market fall today?

According to observations, increased economic uncertainty and geopolitical concerns contributed to the market’s collapse. So, cryptocurrencies joined the fall without any delay as traditional markets trembled. In response to fresh inflation statistics showing a third consecutive month of acceleration, U.S. stock markets saw a decline at the same time as this market collapse. Any lingering hope for immediate Federal Reserve interest rate cuts has been dashed by this hotter-than-expected Consumer Price Index (CPI) data, casting doubt on the notion that inflation was almost under control.

Meanwhile, as the crypto market eagerly waits for the next Bitcoin halving which is scheduled to take place between April 19th and April 20th, the hopes of a rebound continue to loom. Experts predict that the price of Bitcoin will shoot above $80,000 following the halving event. Some investors see this as an opportunity to buy cryptocurrencies at discounted prices, while others lose confidence and leave their positions.

Ultimately, the crypto market collapse today was caused by major economic uncertainties, a shift in investors’ confidence, and a pre-market collapse ahead of the coming Bitcoin halving event.

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