The Crypto market has experienced a notable downturn in the last 24 hours, with the overall market cap dropping by 2%, now standing at $3.1 trillion.
Bitcoin price dipped below $90,000, currently trading at $89,183. ETH price also declined and dropped below $3,000 and is currently trading at $2,929. XRP price also took a similar direction, going down to 1.93, which is a 1% drop.
Other cryptocurrencies like Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) have had a bearish trend as well, and this has made the overall market struggle. Let’s uncover why the crypto market is down today (Jan 23)
Here Why Is Crypto Market Down Today
The crypto market is experiencing a sharp downturn today, driven by geopolitical instability, major options expirations, and notable institutional outflows. This has exposed the market, and the overall crypto market capitalization is likely to fall below $3 trillion.
Geopolitical Uncertainty and Market Volatility
The latest volatility in the global markets has been triggered by President Trump’s recent speech at the World Economic Forum (WEF) in Davos. In his speech, Trump told that he might impose heavy tariffs on European countries in the process of his new bid to buy Greenland.
The ultimatum of greenland-or-tariffs has led to an overload in the relations between the US and Europe, with the threat of a growing trade war.
The pressure is mounting, and such is leading investors to pull out their investments on risky commodities such as Bitcoin and other altcoins, which is one of the reasons behind the overall fall of the market.
Bitcoin Options Expirations Create Pressure on Market Sentiment
The expiration of over 21,000 Bitcoin options contracts, worth a combined total of $1.94 billion, is adding significant pressure to the market today. Their expiration on January 23 has added to the uncertain state of the market.
Whilst the put-call ratio is neutral with a 0.82 ratio, the magnitude of these expiring contracts has presented more of an issue to the traders. The Crypto Fear and Greed Index has already reached the level of extreme fear, which means that the level of investor confidence has significantly diminished.
Institutional Outflows Contribute to Market Weakness
To compound the pressure, institutional outflows of cryptocurrency funds have risen significantly. In the last two days, an exchange-traded fund (ETF) that tracks Bitcoin has suffered a massive outflow, amounting to about $500 million.
The BlackRock Bitcoin ETF, as an example, experienced a net outflow of $22.35 million on January 22. Outflows of Ethereum ETFs have also been experienced, and more than $41 million has been pushed out of the market.
In spite of these withdrawals, Solana ETFs saw small inflows, implying a minor change in the interest of the investors. Such outflows by institutional investors reflect an increasing lack of confidence, with many of them seeming to be pulling out of the market because of the present economic and geopolitical uncertainties.
In conclusion, the political risks, the expiring Bitcoin options, and institutional outflows have put the crypto market under strain, and some traders and investors have taken a more reserved approach in the wake of an uncertain future.
Source: https://coingape.com/trending/top-reasons-why-crypto-market-down-today/
