2 Reasons Why Crypto Just Crashed

Understanding the Recent Crypto Crash
The cryptocurrency market recently saw a significant downturn, with Bitcoin’s price dropping below $100,000 and the crypto fear and greed index moving from 88 to 69. Here's why this happened and what might come next.

The Federal Reserve’s Impact
A crucial trigger for the crash was the Federal Reserve's decision to cut interest rates by 0.25%. While this was expected, the Fed’s indication of only implementing two more cuts by 2025 highlighted persistent inflation concerns. This hawkish stance sent shockwaves across cryptocurrencies and risk assets, plummeting U.S. equity markets and pushing Treasury yields to new highs.

Profit-Taking and the Wyckoff Method
Another reason for the crypto decline was profit-taking by investors, aligning with mean reversion and the Wyckoff Method distribution. When crypto assets, like Solana, rally significantly, profit-taking can ensue, causing mean reversion as they fall back towards historical averages. The Wyckoff Method suggests we're in a distribution or early markdown phase.

Potential for a Rebound
Despite the downturn, there’s potential for recovery. Bitcoin’s cup-and-handle pattern points to a rally around $122,000, which could spark a resurgence across altcoins. However, caution is advised as this could result in a “dead cat bounce,” where a temporary recovery is followed by further declines.

Actionable Takeaways
In the current climate, staying informed and vigilant is key. Monitor central bank policies, stay updated on crypto technical analyses, and strategically plan your investments. Be cautious of market overreactions and assess crypto fundamentals to navigate this volatile landscape effectively.