Why Is Crypto Crashing Today? – Coinpedia Fintech News

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Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.
Crypto market lost $400 billion in 24 hours, with major coins dropping nearly 20%.
Trump’s tariff war triggered fears of inflation, crashing both stock and crypto markets.
Over $2.18 billion in crypto liquidations affected 715,000 traders, with Binance seeing the biggest loss.
Bitcoin risks falling below $90K as the U.S. dollar strengthens and fear index drops to 38.
The crypto market is facing a massive sell-off, wiping out over $400 billion in just 24 hours. Major cryptocurrencies like Bitcoin, Ethereum, XRP, and Dogecoin have all taken a hit, with some dropping by nearly 20%. But what’s causing this sudden crash? Let’s dive into the key reasons behind the turmoil.
One of the biggest reasons behind the market drop is the recent trade war sparked by former U.S. President Donald Trump. Declaring a national emergency under the 1977 International Emergency Economic Powers Act (IEEPA), Trump imposed strict tariff rules, 25% on Mexico and Canada and 10% on Chinese imports.
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The market reacted instantly, fearing higher prices, rising inflation, and economic instability. As a result, U.S. stock indexes fell sharply, dragging the crypto market down with them. 
Aside from external economic factors, Bitcoin’s network activity has declined significantly. Data from CryptoQuant shows that the mempool is nearly empty. This means fewer transactions are taking place, which is unusual for Bitcoin.
Additionally, Bitcoin transaction fees have fallen to just 1 sat/vB, signaling low demand for block space. This is the lowest level of activity recorded since March 2024.
The market has also seen a wave of liquidations, with over $2.18 billion worth of crypto positions being wiped out in a day, affecting more than 715,000 traders.
Long traders suffered the most, losing $1.85 billion, while short traders lost around $334 million. The largest single liquidation happened on Binance, where one trader lost $25.64 million in a single trade.
Another factor weighing down Bitcoin is the strengthening U.S. dollar. The U.S. Dollar Index (DXY) has surged to 108.50, while the 10-year Treasury yield has risen above 4.54%. 
Historically, Bitcoin moves in the opposite direction of the dollar and Treasury yields, meaning a stronger dollar often leads to lower BTC prices.
Currently, Bitcoin is struggling to hold above $93,000. If it falls below the psychological support level of $90,000, analysts warn that further declines could be ahead. Meanwhile, the Crypto Fear & Greed Index has fallen to 38, shifting from Neutral to Fear.
However, if BTC manages to recover and break above $95,000, it could regain its bullish momentum.

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