Bitcoin Crash Today: 3 Major Reasons the Market Is Falling

Key Highlights

The crypto market has taken a toll as geopolitical tensions rise.
Many fear market manipulation after RaveDAO’s (RAVE) collapse, as its value plummeted by 95%.
Crypto hacks have been immense this month, signalling wide panic in the market.

In addition to Bitcoin, the broader crypto market has been in a major downturn due to rising tensions between the US and Iran. The markets have also been plunging as many fear market manipulation and increasing crypto hacks.

The Bitcoin (BTC) price has plunged below $75,000, and the total market capitalization has reached $2.6 trillion, marking a 1.29% decrease over the last 24 hours.

Geopolitical Tensions Driving Crypto Market Instability

The crypto market crash continues as geopolitical tension between the US and Iran rises. Bitcoin and most altcoins saw a small surge on Friday when the two countries reached an agreement to reopen the Strait of Hormuz.

The main issue comes as Iran pointed out discrepancies in some of Trump’s statements, such as that the blockade against Iranian ports would continue. After this, Iran announced it was shutting down the Strait, and some ships had to turn back.

At the same time, the US announced that it had captured an Iranian ship, which raises skepticism about the peace talks.

Investors also fear that the ongoing war between the US and Iran will continue, which is what Israel wants. It would also cause the crude oil prices to rise and increase overall market volatility.

RaveDAO crash raises market manipulation

Analysts also point out that speculation of market manipulation is another reason for the crypto market crash. The fears spiked after the recent rise and fall of RaveDAO. The token’s value plunged by over 95% in around 24 hours.

The cryptocurrency quickly rose from nowhere into one of the biggest players in the industry. Its prices started at $1 the beginning of this month and surged to a high of $28; its fully diluted valuation (FDV) hit $24 billion.

RaveDAO’s price then plunged below $1. This is during the weekend when ZachXBT, an online investigator, provided data showing that over 90% of the 1 billion token supply was held in just three team-linked multi-signature wallets. Investigators flagged a pattern in which millions of tokens were moved to exchanges like Bitget and Binance, signaling to the market that a massive ‘dump’ was coming. Moreover, the transfer of 18.58 million tokens to Bitget occurred hours before the parabolic state without any public announcement or operation justification from the team.

He also warned that some of the top cryptocurrencies were exhibiting similar characteristics. It includes tokens like MemeCore, Pippin, Siren, and River. These tokens seem to have emerged from nowhere and often experienced surges on low volume and open interest.

The Surge In DeFi Hacks

The crypto market is also witnessing a rising number of crypto hacks. According to data compiled by DeFi Llama, the hacks in the DeFi space increased to $600 million this month, the highest recorded since February last year.

The latest hack occurred over the weekend when a hacker stole about $296 million from Kelp, a major player in the crypto industry. Although the real culprit has not been caught, analysts believe the hackers are affiliated with Lazarus Group, a North Korean-based hacking organization.

The hack has caused panic selling across the market; investors dumped over $5 billion from Aave, the biggest lending platform in the crypto industry. Its total value locked (TVL) has dropped from over $49 billion to $18 billion today. The rsETH hack has left Aave financially exposed, with the stolen tokens used as backing for loans, and the platform forced to absorb the losses.

Furthermore, the crypto crash is related to Bitcoin’s bearish flag pattern on the three-day chart, raising concerns that the recent rally was a bear trap.

Conclusion

The US-Iran war has become a major catalyst for the crypto market crash. Although the peace talks brought an upturn, ongoing tension still causes a plunge. Moreover, the market hack and speculation about market manipulation have affected investor confidence. If the US and Iran could reach an agreement anytime soon, it would help the market revive.

Also Read: Crypto Liquidity: The Complete Guide to Understanding Liquidity in Cryptocurrency Markets