Crypto Market Crashes Below $3 Trillion as Bitcoin Nears $90,000 Support

The crypto market has taken a massive hit in the past 24 hours, with total market capitalization dropping below the crucial $3 trillion mark

The crypto market experienced a significant downturn in the past 24 hours, with the total market capitalization dropping below the crucial $3 trillion mark and reaching $2.98 trillion, as observed in the chart from TradingView. This sharp decline of over 7% hints at a potential further slide in crypto prices.

Moreover, as Bitcoin inches closer to the critical psychological level of $90,000, market sentiment is turning increasingly bearish. If Bitcoin fails to hold above this mark and drops lower, it could trigger an even more severe crash, dragging altcoins further into the red.

Here are some key factors contributing to the crypto market crash:

1. Overall Crypto Market Downtrend:

The entire crypto market is experiencing a broad sell-off. Bitcoin, being the leading indicator of crypto sentiment, is struggling, which in turn affects the entire ecosystem. Historically, altcoins tend to crash harder and recover slower than Bitcoin, leading to increased fear among investors.

2. Federal Reserve’s Tight Monetary Policy:

The Federal Reserve is continuing its quantitative tightening (QT) policies, which signals that interest rate cuts are unlikely in the near future. Higher interest rates make risk assets like cryptocurrencies less attractive, resulting in more sell-offs.

Additionally, there is still uncertainty regarding whether Donald Trump’s administration will implement the "Strategic Bitcoin Reserve" plan, which could provide a massive boost to Bitcoin but has yet to materialize.

3. Stock Market Weakness Affecting Crypto:

The correlation between the crypto market and traditional financial markets remains strong. Last week, the S&P 500 experienced its worst day in two months, falling by nearly 2%. A weak stock market often translates to a weak crypto market, as institutional investors adjust their risk exposure.

4. Bybit Hack Shaking Investor Confidence:

A recent security breach at Bybit, a major crypto exchange, has heightened fear among investors. Many traders are now hesitant to enter the market, reducing overall buying pressure and leaving prices vulnerable to further declines.

Top 5 Crypto Losers in the Crash:

As the crypto market remains volatile, traders are keeping a close eye on Bitcoin’s $90,000 level. If we see further downside, expect more pain ahead for altcoins and the entire market.