Why did Crypto CRASH Today and should you EXIT the market?

Why did Crypto CRASH Today and should you EXIT the market?

May 3rd: Crypto Market was recovering since the last crash due to Russia-Ukraine Conflict. However, the market has crashed and lost all its gains made in last 3 weeks.

Here is “Why Did Crypto Crash Today”

Since the winter of December 2021, the Crypto market has been under pressure from US regulations. The Crypto market has been lower since then. In February end, the Russia-Ukraine conflict led to the global market losing momentum. The Crypto market could not keep itself protected from crashing. The market crashed massively.

However, the market has been recovering since the end of March but once again, the market has crashed and this it is is caused by the new US Fed’s monetary policy.

In 2021, the overall crypto market hit the new target. Led by Bitcoin, the overall crypto market cap was above $3 T in the 2nd half of 2021. However, the market since then has retreated and it has not been able to achieve that feat again. Currently, the overall market cap is lower than $2T. Bitcoin’s dominance is currently 40.69% of the total market cap.

Below is the list of Top 10 cryptocurrencies and how they have performed since January 2022:

RankMarket CapYTD %
1Bitcoin$732 B-19.27%
2Ethereum$343 B-24.42%
3Tether$83 B-0.05%
4BNB$63 B-25.89%
5USD Coin$49 B+0.02%
6XRP$29 B-26.63%
7Solana$29 B-50.52%
8TerraLUNA$29 B-7.24%
9Cardano$26 B-42.54%
10TerraUSD$18 B+0.08%

Among the top 10 cryptocurrencies with respect to their market cap, barring the stable cryptos, all the cryptos are trading lowers since January 2022. Solana is the worst-performing crypto as it has lost over 50% of its value since January 2022.

Solana is followed by Cardano which is down over 40%. Bitcoin on the other hand is down 20% since January 2022 and ETH about 25%. Terra Luna is the best-performing crypto among the Top 10 barring the stable coins. It is down around 8% since January 2022.

Before we discuss Why did Crypto Crash Today, let us discuss why had crypto crashed in February 2022 end:

Here are a few reasons for “Why did Crypto Crashed in February end?”:

1. Russia-Ukraine Crisis

The Crypto market has been volatile and even a small event in any part of the world has affected the market. The latest Russia-Ukraine crisis has been the major reason for the crypto market to crash once again. For the last few days, due to the fear of war, the market was trading lower but a slight recovery in the market was noticed.

After the Russian President Vladimir Putin announced a military action on Ukraine the market lost all the gains that it had made in January 2022.

Bitcoin plunged below $36,000 which was the lowest in 2022 as of now. Bitcoin lost almost half its value since its November high of $68,990 due to geopolitical tensions.

The event directly led to a panic sell-off and as a result, the market crashed.

2. The US Fed Regulation

The US Fed back then had indicated that there may be four rate increases in 2022. This indication from the US Fed spooked the global markets. Added to it the Feds also indicated that there may be regulations for the cryptos. This announcement led to multiple crashes in the crypto market.

Now let us Discuss, “Why Crypto Crashed Today”

The Crypto market has been recovering after the Russia-Ukraine conflict led to the crash. However, the market is again under deep pressure and is trading lower. The latest crypto market crash was induced by the US Fed announcement about tighter monetary policy. Fed tightening by 0.5 percentage points as well as a $95 billion per month balance sheet run-off sent crypto markets spiralling lower.

The crypto market has been highly dependent on the momentum of Bitcoin. It has been noticed, that the positive momentum of Bitcoin price has influenced most of the cryptos and thereby led to the surge in the crypto market, lowering the price of Bitcoin, the market seemed to have crashed on most occasions.

Some Tweets with respect to Crypto Market Crash

Why did Crypto Crash Today? Some Videos

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Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Index or Individual Stocks. Please consult a registered investment advisor to guide you on your financial decisions. 



Subhash, Founder of Crowdwisdom360 is an MBA and a Trained Financial Advisor with an extensive background in Forecasting in Financial Services and Politics. He has appeared many times on National TV and has written for a variety of magazines on Wealth Management and Election Strategy.