Why Cryptocurrencies Are Facing a Significant Downturn

The cryptocurrency market is poised to conclude its prolonged stagnant phase, likely hitting a more considerable low. Altcoins have failed to capitalize on either upward or downward movements, with the consolidation process contributing further to losses in altcoins. Currently, Bitcoin $111,145 has dipped to around $94,600, raising concerns about the possibility of even deeper declines.

What Is Causing the Drop in Cryptocurrencies?

At 05:00 Turkish time, former U.S. President Trump and Elon Musk will hold an interview. In this discussion, we might hear Musk’s previous mocking views on cryptocurrencies. Additionally, about 24 hours later, the FOMC Minutes will be released, likely revealing unfavorable insights. Considering the recent Fed meeting and Powell’s statements to Congress, it’s probable that the minutes will contain more hawkish details.

The risk of Trump’s tariffs causing a temporary inflation spike, combined with Powell’s comments on monitoring PCE for the U.S. Producer Price Index, has muddied the waters in risk markets. With the upcoming PCE data just days away, the minutes could exert pressure on the market for over a week. Consequently, investors are inclined to reduce their risks by selling off assets.

Despite the resumption of FTX refunds, with nearly 80% of balances under $50,000 being returned, the lack of movement in Bitcoin and altcoins has been somewhat disappointing.