The crypto market crash continued on Monday, with Bitcoin and most altcoins in the red. The price of Bitcoin fell to $75,000, while the market capitalization of all coins fell by 4.4% in the last 24 hours, reaching $2.55 trillion.
Most altcoins were in the red, with the main laggards being tokens like River, Monero, Ethereum, Nexo, Chainlink, and Kaspa. Ethereum fell 10% in the last 24 hours, hitting a low of $2,200.
Crypto Market Collapsed as Fear and Greed Index Falls
The current crypto market crash occurred as the Fear and Greed Index moved towards the extreme fear zone of 15, the lowest level in over a month.
The growing fear is occurring as many investors capitulate and begin selling as the sector continues to underperform the market. For example, spot Bitcoin and Ethereum ETFs lost assets in January, continuing a months-long trend.
Data shows that liquidations in 24 hours totaled more than $735 million, while open interest fell 5% to more than $108 billion. The decline in open interest is a sign that investors are not using as much leverage as in the past.
At the same time, high liquidations occur as exchanges close leveraged trades after reaching their margin levels. Ethereum positions worth over $272 million were closed, while Bitcoin positions worth $249 million were closed.
Kevin Warsh and Iranian tensions
There are two big reasons why the crypto crash is happening this year. For example, Donald Trump nominated Kevin Warsh to become the next chairman of the Federal Reserve.
Historically, Warsh has been a hawk who opposed quantitative easing and criticized the Fed for cutting interest rates too soon. Therefore, even though Trump promised a Fed chairman who would cut interest rates to 1, there’s a good chance Warsh won’t do it.
Risk of war in the Middle East
The other key reason for the current crypto market crash is the lingering fear of war in the Middle East. Iranian leaders have warned that there would be a regional war if the United States attacked, which explains the withdrawal of Brent and West Texas Intermediate (WTI).
Donald Trump continues to build up an armada in the region. He’s also under pressure from hawks like Lindsey Graham, Mike Pompeo and Mark Levin, who he watches all the time on Fox News.
These neoconservatives have convinced Trump that the only way to deal with Iran is to overthrow the regime. Therefore, the crypto market crash happened because Bitcoin and other altcoins are not safe havens.
Bitcoin Price Technical Data Points to More Downside
The weekly time-series chart shows that Bitcoin price is signaling further decline in the near term. It has broken below key support at $80,488, the lower side of the bear flag pattern.
Bitcoin also fell below the strong, pivot and reverse levels on the Murrey Math Lines tool. It remains below the 50-week moving average and the lower part of the ascending wedge tool.
Therefore, the most likely scenario is that Bitcoin continues to fall, potentially to the ultimate support level at $50,000. Such a move would indicate more declines in the crypto market.
