The cryptocurrency market plummeted today, and Bitcoin fell below US$62,000 was revealed

Why did the cryptocurrency market plummet today-Bitcoin fell below US$62,000

Cryptocurrency fell 1.8% in the past 24 hours, and its total market value fell to US$2.14 trillion. Markets panicked as the United States and Iran once again became hostile. This is not a phenomenon unique to cryptocurrencies, and the stock market has also been hit. Bitcoin prices fluctuate in sync with the S & P 500 index (85% fit) and even gold (61% fit)-all assets are currently closely correlated. Bitcoin itself fell nearly 2% to $61684, dragging down the overall market.

The past week has been turbulent. More than $1.05 billion in cryptocurrency positions were cleared. Bitcoin fell from $63900 to $61000, then soared to above $64600, and plunged again to below $61700. Here are the reasons for today\'s market decline.

The US-Iran conflict dragged down the cryptocurrency market

The biggest catalyst for today\'s decline in the cryptocurrency market was the resumption of the conflict between the United States and Iran. President Trump announced the end of the agreement with Iran and subsequently launched air strikes that hit more than 80 Iranian military targets. Iran retaliated, attacking three merchant ships near the Strait of Hormuz. Everyone had a hunch that the situation would get worse. Warning: Something extremely bad is about to happen... President Trump has just announced the end of the deal with Iran. He also announced that he would launch new air strikes against Iran tonight. Japan has fallen by more than 30 trillion yen. South Korea has fallen by more than 200 trillion won. This kind of slump never...

The market responded. Trillions of dollars evaporated in Asian stock markets. Oil prices soared to more than $70 a barrel. Investors quickly sold risky assets. Rising oil prices also mean that inflation may remain stubborn, putting pressure on the central bank to keep interest rates high-not cutting interest rates in the short term. This environment has historically put pressure on cryptocurrencies and technology stocks.

Liquidation and institutional selling increased pressure

Bitcoin prices fluctuated sharply this week: first fell from US$63900 to US$61000, and US$497 million was cleared alone; then rebounded to more than US$64600, and another US$309 million was cleared; now it has fallen below US$61700 again, and another US$248 million evaporated. In just seven days, leveraged positions totaling more than $1.05 billion disappeared. It has been a brutal week for traders.

Institutional activity also weakened significantly. Cryptocurrency analyst Ted pointed out that in times of geopolitical uncertainty, institutional investors reduce their risk exposure and institutional selling of Bitcoin is accelerating. From a technical perspective, analysts see $59000 to $61500 as the next major liquidity range, but the larger clearing cluster remains concentrated between $64000 and $66500-an area that will become a key resistance level if buyers return.

Weak capital inflows limit rebound

Liquidity into the cryptocurrency market has slowed down significantly. Inflows of stablecoins to exchanges are 31% lower than the annual average, and the combined market value of USDT and USDC is shrinking at a rate of more than $3 billion per month. The decrease in new funds made it difficult for buying to withstand huge sell-offs. On-chain data also shows continued weakness: about 7.5 million bitcoins (accounting for about 37% of the circulation supply) are currently in a floating loss, setting a record for this market cycle.

Glassnode estimates that the rate of surrender by long-term holders has peaked at $280 million a day;ETF flows remain net outflows; and although derivatives traders maintain a moderate long bias, options markets are still pricing higher downside risks.

Bottom construction in progress

After five months of running below the key investor cost base, Bitcoin is still in the deep value area. The rate of surrender by long-term holders has reached a daily peak of US$280 million, and ETF traffic remains a net outflow. The derivatives market is cautiously bullish, but options still have downside risks on the surface. The bottom-building process...

Where will the cryptocurrency market go next?

What happens next? This depends on the situation in the Middle East. If the situation cools down, the market may breathe and cryptocurrency may gain a foothold. But if the conflict escalates, oil prices continue to rise, inflation remains high, and global markets remain tense, then Bitcoin and the entire cryptocurrency will come under pressure. More violent fluctuations are currently expected. There is bottom support for Bitcoin prices in the $59000 to $61500 area-if this area holds, the market may stabilize; but the $64000 to $66500 above is strong resistance. Before breaking through these two ranges, the market will only be noise and anxiety.

Frequently Asked Questions

Why did cryptocurrencies plummet today? Another military strike broke out between the United States and Iran, triggering widespread risk aversion in global financial markets and causing the cryptocurrency market to fall. Rising oil prices, falling stocks, and more than $1.05 billion in cryptocurrency liquidations have exacerbated selling pressure.

Why did Bitcoin prices fall? Escalating geopolitical tensions and increased institutional selling prompted investors to reduce exposure to risky assets, causing Bitcoin prices to fall. Weak stablecoin inflows, net outflows of ETF funds and large-scale liquidations also put pressure on Bitcoin.

Is investing in Bitcoin now a bad idea? Not necessarily, but investors should be prepared for geopolitical risks that continue to affect the market and volatility may remain high. Many analysts believe that the bottom-building process is still in progress, so risk management and long-term investment strategies are particularly important.