Why Crypto Down Today: Reason Behind Crypto Market Crash

The total crypto market is down today as the Fed’s rate cut policies have triggered a profit-taking wave among traders. Despite the U.S government reopening after 43 days and the upcoming launches of new exchange-traded funds, the broader crypto market is still struggling, and prominent cryptocurrencies like BTC, ETH, SOL, and XRP are all falling.

According to today’s market analytics, Bitcoin, the largest cryptocurrency by market cap, is down more than 6% and is trading below its $100K psychological level. Bitcoin’s price today is $96,400.21, and the digital gold is trading with a significant short-term bearish momentum in the market.

Ethereum is down around 10% today and trading below its $3,250 support level, reflecting broad market weakness. Solana, on the other hand, fell from its $150 resistance level and is currently trading at $142, closer to the $140 support level. XRP, the official cryptocurrency of the XRP Ledger, is down by 8% today and will probably lead to a further retest of support zones near $2.27–$2.00. According to the latest reports, the cryptocurrency market fell around 2.3% in the past 24 hours, extending the monthly decline to 14.98%. 

Crypto market experts observe that multiple factors control the crypto market, and the major factor driving the current crypto market downturn is the Fed rate cut results and the uncertainty regarding a possible December rate cut.

Sean Kun, a crypto expert, stated that crypto has been dumping lately.

He mentioned that waking up and seeing the red signal on CMC that morning was a shock. He explained that the main reasons why crypto was dropping were that the Fed was cautious about further rate cuts, which led to a stronger USD and higher yields pulling money out of risk assets. He stated that it looked more like a macro worry and leverage washout correction than a total fundamentals breakdown.

The U.S. Federal Reserve recently cut interest rates by 25 basis points, anticipating a boost in crypto prices. These kinds of rate cuts would normally make the risky assets like crypto attractive, but in the previous Fed rate cut, many traders sold their crypto for profits, causing a significant price drop. The media and crypto community called the scenario a “sell-the-news” reaction.

According to the latest reports, the Federal Reserve is diminishing the chances of a possible December rate cut, fueling the current crypto downturn.

Fed Rate Cut Impact And Monetary Policy Uncertainty Impacts Crypto Market Downturn

The U.S Federal Reserve’s plan to drop the possible december interest rate cut is a major factor, driving the current market downturn. The news is almost confirmed that the Federal Reserve will not cut interest rates in December as previously planned, causing uncertainty among traders. Mainstream media and expert analysts report that the odds of a cut have dropped sharply in the past few days and currently stand at 53%. They stated that these odds stood at over 90% a few weeks ago. This uncertainty has triggered market risk and forced traders to buy less and sell more, and the latest reports suggest that the Fed officials have diminished hopes for a possible easing of monetary policy and has told investors to adopt a risk-averse stance.

Apart from the Fed rate cut, factors like weak ETF inflows, the Fear and Greed index retreat, plunging of the crypto-related stocks are some other factors that impact the current market downturn. Bitcoin’s price dropping below $100K has a big impact on the broader crypto market performance.

Market Intelligence platform Santiment posted on X that Bitcoin had dumped below $100K for the second time that month.

They predictably noted that this had caused a wave of FUD and concerned social media posts from retail traders. They added that at that time, $BTC had just entered into a significant bearish/fearful bias zone, which historically meant that buys were less risky than average due to panic selling by retail traders.

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