Why Is Crypto Down Today? Three Reasons Why Bitcoin Is Falling

The crypto market has suffered a sharp decline, wiping out billions in value. Bitcoin, Ethereum, XRP, and Solana have all fallen more than 10% in the past 24 hours. Over 307,000 traders faced liquidations, with total losses reaching $1.01billion.

This downturn comes after a series of economic and geopolitical shocks rattled investor confidence. Here are the three main reasons behind the latest market crash.

Trump’s tariffs spark market fears

New tariffs imposed by President Donald Trump have triggered a global selloff across financial markets. The US government announced a 25% tariff on imports from Canada and Mexico, along with a 10% tariff increase on Chinese goods. These measures have escalated trade tensions, pushing investors toward risk-off assets.

Stocks have plunged, with the S&P 500 losing $1.5trillion in value. The crypto market, often seen as a high-risk investment, has followed suit. Traders are liquidating positions to avoid further losses, leading to a cascading effect on digital assets.

Atlanta Fed’s recession warning

The Federal Reserve Bank of Atlanta’s latest GDPNow forecast predicts a sharp economic downturn. The model estimates a 2.8% contraction in real GDP for Q1 2025, mirroring declines seen during the early days of covid-19.

A weakening economy raises concerns about reduced liquidity and lower investment inflows. Many investors are now pricing in multiple Federal Reserve rate cuts, but uncertainty remains high. This economic slowdown has fueled panic selling across traditional and digital markets.

Mass liquidations amplify the selloff

Leverage trading plays a major role in crypto volatility. As prices fall, long-position traders face forced liquidations. Over $1.01bn in positions have been wiped out, accelerating the market’s decline.

Bitcoin dropped below $83,000, triggering margin calls across major exchanges. Ethereum and Solana have suffered even larger losses, with prices plunging up to 25%. The sheer volume of liquidations has created a snowball effect, pushing prices down even further.

What’s next for the crypto market?

The market remains highly unstable. Investors are waiting for signs of stability before re-entering. Federal Reserve policy decisions and trade negotiations will be key factors in the coming weeks.

For now, crypto remains under pressure. If economic conditions improve, the market may recover. However, if trade tensions persist and economic data worsens, further declines are possible.