A crypto crash is happening today, with Bitcoin falling to $108,000 and top altcoins like Solana, Cardano, Pepe, and Shiba Inu being deeply in the red. This article explores some of the top reasons contributing to the ongoing crypto market crash and what to expect.
Crypto crash happened amid inflation concerns
One reason for the ongoing crypto crash is the upcoming US Consumer Price Index (CPI) data, which will come out on Friday this week.
These numbers are expected to show that the US inflation remained high in September as companies continued to account for Donald Trump’s tariffs.
The headline Consumer Price Index (CPI) figure is expected to come in at 3.1%, up from the previous 2.9%. If accurate, this figure will confirm that the country’s inflation remains a challenge.
Worse, there are signs that inflation will continue rising as the crude oil price jumped after signs of a truce between the US and India emerged. One part of the deal is that India will largely stop buying Russian oil in exchange for tariff relief from the US. India will also commit to buying more US oil this year.
Brent, the global benchmark, rose by 3% and hit the important resistance level at $64, while West Texas Intermediate (WTI) jumped to $62 after the US blacklisted Rosneft and Lukoil, two of the biggest oil companies in the country. Trump also plans to talk to Xi Jinping about China’s crude oil imports.
A high inflation figure will make it harder for the Federal Reserve to cut interest rates in the coming meetings. Cryptocurrencies normally do well when the Fed is cutting rates.
Liquidations tantrum
The other main reason why the crypto market crash is happening is that traders are going through a liquidation tantrum. This is a response to the huge $20 billion liquidation that happened on October 11 this year.
The liquidation affected more than 1.6 million people who saw their accounts wiped out. Historically, crypto prices normally remain on edge after such a big liquidation event, as investors remain in the sidelines.
A good example of this is the fact that the volume in the futures and spot market has tumbled. CoinGlass data shows that the 24-hour volume plunged by 17.6% to $315 billion, while the open interest fell to $147 billion.
The liquidation tantrum will likely remain in place until Bitcoin and other cryptocurrencies rebound and attract Fear of Missing Out (FOMO).
Bitcoin whale activity
The crypto market is also going down is of an obscure Bitcoin whale who has made millions shorting Bitcoin. This whale made over $200 million in his recent Bitcoin short trade.
He has now opened a new short trade worth over $234 million through Hyperliquid. His trades are being scrutinized because the last one was opened 30 minutes before Donald Trump made his tariff announcement. As such, there are rumors that this whale is associated with Donald Trump.
BTC price has formed a risky pattern
The crypto crash is also happening because, as the chart above shows, the Bitcoin price has formed the risky double-top pattern at $124,373 and is now at the neckline.
It is also about to form a death cross pattern, which happens when the 50-day and 200-day Weighted Moving Averages (WMA) cross each other. These patterns point to more Bitcoin price crash, pointing to more downside in the near term.
A Bitcoin price crash will be highly bearish for the broader crypto market. It is also coming as Bitcoin ETF outflows rise.
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