The Great crypto crash has rocked markets, but why crypto is crashing today and will crypto recover? Dive into our analyst’s answers.

Bitcoin, Ethereum, and top altcoins are under pressure. Following the sharp drop on January 7, the total market cap is down nearly 9%, as the valuation of all crypto assets is now down to around $3.4 trillion.

The world’s most valuable coin has extended yesterday’s losses, falling below $96,000 nearly 36 hours after blasting past $101,000 on Monday. As bears press on, there are real fears that altcoins would suffer, posting even more losses and dragging the broader market down.

So far, Coingecko data shows that Ethereum, Solana, XRP, and other top altcoins are in the red. However, among the top 10 most valuable coins, Cardano and Dogecoin are leading the losses, each shedding over 10% in the past 24 hours.

The Great Crypto Crash: Why Is Crypto Crashing?

The current sell-off and shift in sentiment can be mainly attributed to macroeconomic and market-specific factors.

Analysts observe that concerns about rising treasury yields in the United States are at the top of the list.

Considering Bitcoin is non-yielding, investors are flocking to treasuries, which are more stable and offer higher returns. The 10-year treasury note has risen to 4.25%, while the 30-year and 5-year bonds are at 4.50% and 4.38%, respectively, at press time.

Rising yields, analysts say, can explain the rapid sell-off seen in crypto in the past 24 hours.

Additionally, gleaning from the December Federal Reserve (Fed) meeting, the central bank is unlikely to slash rates at an accelerated pace as projected last year. As seen in 2022, rising interest rates negatively impact crypto assets. Today’s minutes will show the monetary policy direction expected in 2025.

Combining this development with improving the jobs market and falling inflation, crypto assets might not rise as fast as anticipated. From the November JOLTS job openings released on January 7, there were 8.1 million openings.

As The Dust Settles: Can Crypto Recover and Bitcoin Recover?

Despite the sell-off, there is hope. How crypto prices perform today could shape the immediate term.

(BTCUSDT)

Technically, Bitcoin is still in a sideways chop, confined inside a broad range between $108,000 and $90,000. As long as prices remain within this range, the upside is valid, and the bulls of Q4 2024 will be in control. However, what’s needed is a high volume close above the psychological $100,000 mark for more confidence in trend continuation.

Beyond price action, the co-founder of BitMEX, Arthur Hayes, thinks crypto prices will be buoyed by rising USD liquidity in Q1 2025. In his view, increased spending from the United States Treasury Department could boost gains in Bitcoin and Ethereum in the coming days.

Increasing institutional interest in Bitcoin by smaller corporate players could also drive demand in the coming days. Seth Hertlein, a Ledger executive, said if these players begin accumulating BTC, following in the steps of MicroStrategy, prices will rally hard.

(Source)

Offering hints of demand, despite the sharp drop on January 7, institutions took this opportunity to accumulate more coins. According to Soso Value, institutions bought over $52 million of BTC. Specifically, institutions bought over $596 million of BlackRock’s IBIT yesterday.

EXPLORE: Elon Musk Bans Andrew Tate’s BRUV Party – What’s Next For ‘Vote Bruv?’

Join The 99Bitcoins News Discord Here For The Latest Market Updates

The post The Great Crypto Crash: Discover Why Crypto is Crashing Today and Will It Recover? appeared first on 99Bitcoins.