The Cryptocurrency market was aggressive today, hitting major assets hard with a sharp drop. This has resulted in the Crypto Market Crash today with Bitcoin falling to $96,418 and significant losses to major altcoins like Ethereum, Solana, and XRP.
On 8 January 2025, the world’s crypto market capitalization saw a downfall of 6.12%, touching the value of $3.36 trillion. At the same time, trading volume had gone up by 35.28% and stood at $172.39 billion. The Fear & Greed Index stood at 54, marking a neutral market sentiment. Amid this fiasco, BGB alone went up while all other assets had fallen during the overall volatility of the market.
Why the Sudden Crypto Market Crash?
1. Sharp Rise in U.S. Treasury Yields Leads to Risk Aversion: One of the primary causes of the crypto market crash is the sharp rise in U.S. Treasury yields. Over the past decade, yields have risen dramatically, and investors have changed their behavior. When Treasury yields increase, traditional assets become more appealing to investors compared to riskier assets such as cryptocurrencies, which has led to a shift in capital away from the crypto market.
2. Macroeconomic Uncertainties: Macroeconomic uncertainties, marked by rising fiscal deficits, looming debt ceiling, and other broad economic concerns, also the crypto market crash caused increased market volatility. This made investors nervous, resulting in their reduced exposure to volatile assets like cryptocurrencies.
3. Higher Volatility in Asset Classes: The overall crypto market crash was highly volatile, and the same holds not only for cryptocurrencies but also for traditional markets like equities. A sharp rise in bond yields changed the risk sentiment negatively, selling across asset classes such as Bitcoins, Ethereum, and other altcoins. Such a risk-off behavior translated into more price falls and high market volatility.
Bitcoin Price Today Bears the Brunt
The leading cryptocurrency, Bitcoin, depreciated 5.23% in the last 24 hours to $96,418.88. However, its market capitalization remains firm at $1.91 trillion as a mark of its dominance. It is indicated by the increased volume of trade on Bitcoin as trading volumes jumped by 26.81% to $62.56 billion; this would translate to increasing sell-side pressure as investors adjust to the more general economic surroundings.
Bitcoin has dived under strain because of rising yields for bonds and greater uncertainty about how the Federal Reserve might behave in the future, keeping most crypto traders on the sidelines holding their breath.
Altcoins Struggle Along During Crypto Down
In this respect, Ethereum (ETH), Solana (SOL), and XRP followed a bearish lead during the general slide of a crypto market crash.
1. Ethereum (ETH): The second-largest cryptocurrency, Ethereum, fell 8.61% to $3,352.49. It was one of the worst-hit assets whose prices succumbed to pressure as investors reevaluated risk in light of the overall economic outlook.
2. Solana (SOL): Solana, too dropped sharply by 9.21%. Albeit the altcoin, the growing market concerns translate into volatility since investors start to pull back from more risky assets.
3. XRP: XRP fell by 5.06%, indicating that the market is still jittery and sensitive to external factors such as rising yields and fiscal uncertainty.
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Top Gainers and Losers During the Crypto Market Crash
Top Gainer: BGB
Despite the market downturn, BGB was the only gainer in the top 100 cryptocurrencies and went up by 2.63% to $6.49. This means that although there is an overall crypto market crash decline, some tokens do not exhibit similar declines because of specific factors that make them valuable.
Top Losers
- HYPE: The worst performing in the list of top 100 was HYPE, which fell by 16.69% to $21.32.
- TIA: TIA fell by 14.89% to $4.66.
- ENA: ENA fell 14.84% to $0.9846 as the selloff within altcoins was much deeper.
Conclusion: A series of poor macroeconomic news has been shaking the crypto market with brutal declines in Bitcoin, Ethereum, Dogecoin, and other major digital assets. Rising U.S. Treasury yields, hawkish rhetoric from the Federal Reserve, and fears over fiscal deficits put the market in a risk-off mode that weighs on crypto valuations.
Since the Fear & Greed Index shows a neutral sentiment and has kept the market volatile on a broader basis, it remains unclear when the crypto market will recover. This could continue in the short run with headwinds as the investor sentiment of the market largely depends on the macroeconomic factor. For the time being, crypto traders are asked to stay well-informed and manage risk in this turbulent phase of the market.
Also Read: VIRTUAL Coin Price Cools Down After 133% Surge: What’s Next For Investors?
