Crypto market crash today: 4 key reasons behind the drop

A crypto market crash is currently underway. Bitcoin and most altcoins trade in the red. The downturn erases gains made yesterday.

Bitcoin price dropped from this week’s high of $91,000 to $87,800. At the same time, the market capitalization of all tokens dropped to $2.96 billion. This article explores some of the top reasons behind the ongoing crypto crash.

Crypto Market Crash Triggered by Increased Selling and Potential Manipulation

One of the potential catalysts for the ongoing crypto market crash is increased selling. Some of the biggest companies in the cryptocurrency industry are offloading assets. Their moves add pressure to prices and deepen the downturn.

One of the biggest sellers is Wintermute, a top market maker in the crypto industry. Data shows that the company has moved tokens worth millions of dollars to exchanges.

Wintermute moved tokens worth millions of dollars in the past few hours. The firm transferred assets to major exchanges, including OKX, Binance, and Kraken. These large sales added pressure to the ongoing crypto downturn.

Historically, cryptocurrency prices come under pressure when tokens move to exchanges. Such transfers are usually seen as a signal of selling. This pattern often triggers declines across the market.

Other large entities have dumped tokens in the past few days. Some of these companies are ETF firms like BlackRock, Fidelity, and Grayscale. They have sold coins because of the ongoing ETF outflows.

SoSoValue data shows that spot Bitcoin ETFs shed $142 million in assets on Monday. They have had outflows worth billions of dollars in the past few months. Similarly, Ethereum ETFs have had over $3 billion in outflows, with the cumulative inflow figure falling to $12 billion.

Bitcoin and Ethereum Prices Have Formed Risky Chart Patterns

The other main reason behind the ongoing crypto market crash is that Bitcoin and Ethereum have formed risky chart patterns. This may lead to more downside in the coming weeks or months.

For example, the weekly chart below shows that the Bitcoin price is slowly forming the risky bearish pennant pattern. It is made up of a vertical line and a symmetrical triangle pattern.

This pattern is happening after the coin formed a giant rising wedge. It normally leads to more downside over time.

Similarly, the Ethereum price has formed bearish chart patterns on the daily timeframe chart. It has remained below the Supertrend indicator and the 50-day and 100-day EMAs. The coin has also formed a bearish pennant pattern, meaning that a bearish breakdown is possible.

Therefore, these patterns indicate that Bitcoin and Ethereum prices are likely to continue their downward trend. This has led to further sell-offs in the crypto industry.

Rising Gold Prices and the Swiss Franc is a signs that investors are positioning for risk or turmoil in the market.

Meanwhile, some of the top safe-haven assets have jumped in the past few months. It’s a sign that investors are anticipating turmoil in the market. Gold price jumped to a record high of $4,520, and silver soared to $70 for the first time on record.

The Swiss franc has surged more than 15% against the US dollar this year. Rising American bond yields have fueled the move. This strength comes despite the Federal Reserve cutting interest rates three times.

This performance is a sign that investors are anticipating turmoil in the coming year. This may lead to more crypto market sell-offs.

Apollo Global Management, a leading private equity firm with more than $900 million in assets, issued a statement on Monday. The company said it was shifting largely into cash. Executives explained the move as preparation for expected market turbulence.

Continued Deleveraging as Open Interest Falls

The crypto market crash also continued as deleveraging continued. That was evidenced by the ongoing decline in the futures open interest.

CoinGlass data shows futures open interest fell by 1% on Tuesday. It dropped to $129.4 billion, down sharply from the year‑to‑date peak above $255 billion. Falling open interest is a sign of reduced demand for cryptocurrencies among investors.

In line with this, the crypto crash is happening as traders wait for the upcoming Bitcoin options expiry. It will be worth over $23 billion. It is common for cryptocurrencies to be highly volatile ahead of such a big event.