Crypto Assets market experiences another big dump, multiple factors lead to it.

Recently, the Crypto Assets market has experienced a big dump, mainly influenced by the following factors:

1. The U.S. stock market remains sluggish, with technology stocks being impacted.
2. A certain trading platform suffered a large-scale hacker attack, resulting in huge losses.
3. Crypto Assets investment products are experiencing continued outflows, and investors are becoming cautious.
4. The market faces strong upward resistance, which limits the overall recovery.

The U.S. stock market's fall drags down the Crypto Assets market

The major US stock indices fell again on Monday after experiencing a big dump last week. The Nasdaq index closed down 1.2%, and the S&P 500 index fell 0.5%. Chinese concept stocks were severely impacted, with the Nasdaq China Golden Dragon Index down more than 5%, and the stock prices of several well-known Chinese concept stock companies plummeted.

New developments in the field of artificial intelligence have raised concerns in the market. Reports indicate that a large technology company is reducing the scale of its data center computing power rented in the United States, which may reflect doubts about its own AI computing power construction. In addition, there are also concerns in the market regarding the upcoming financial report of chip giant NVIDIA, as its new generation chip architecture faces issues such as supply shortages, delays, and overheating.

Regarding the outlook for the U.S. economy, analysts warn that risks in the labor market are rising. Factors such as slowing real income growth, a deteriorating real estate market, and shrinking local government spending could lead to an unexpected economic decline, which would have significant implications for the financial markets.

Ethereum Leads the Fall in the Crypto Market

The fall of the Crypto Assets market began on February 21 when a trading platform suffered a hacker attack, resulting in losses of over 1.4 billion dollars in Ethereum and related coins.

As of February 25:

• Ethereum has fallen by 11.5% in the last 24 hours, to $2,503.26.
• Bitcoin fell 4.9% to $91,549.81.
• Other major Crypto Assets such as XRP, Dogecoin, etc. have fallen by more than 10%.

The derivatives market has seen a large-scale liquidation, with over 300,000 traders liquidated within 24 hours, totaling $952 million. The dominance of long liquidations indicates that the market was previously overly bullish.

Despite this, a certain options trading platform believes that the market response this time is relatively mild compared to the collapse of a certain exchange in 2022, reflecting the increasing maturity of the Crypto Assets industry.

Investors continue to avoid risks

Crypto Assets investment products have seen outflows for the second consecutive week. According to statistics, as of the week ending February 21, the total outflow amount reached $508 million, with Bitcoin experiencing the largest outflow of $571 million. This indicates that institutional investors are reducing their investments in digital assets.

Some analysts attribute this to uncertainties in trade tariffs, monetary policy, and inflation, believing that investors are adopting a cautious attitude ahead of the U.S. election.

Market participants are closely watching the U.S. inflation data set to be released this week. The Personal Consumption Expenditures ( PCE ) index, which is the Federal Reserve's preferred inflation indicator, will be released on February 28. Recent data shows that labor market conditions have weakened, which has lowered market expectations for multiple rate cuts in 2025.

Crypto Assets market faces resistance above

From a technical perspective, the total market capitalization of Crypto Assets is facing a key resistance range between $3.28 trillion and $3.31 trillion. The relative strength index (RSI) is around 40, indicating that the market still tends to move downward.

If it falls below the support level of 3.03 trillion USD, it may trigger further selling and even test the 200-day moving average around 2.72 trillion USD. Conversely, if it can break through the resistance level, it may rebound to above 3.2 trillion USD.

Industry Insider Opinions

A co-founder of a well-known trading platform believes that Bitcoin could fall to $70,000 due to the impact of hedge fund arbitrage strategies.

Another crypto assets hedge fund founder stated that a Bitcoin price of $95,000 is not a bad exit point compared to the potential trading prices in the next 6-12 months. He estimates that the possibility of Bitcoin hitting a new high in the next three months is 20%, and the possibility of hitting a new high in the next twelve months is 49%.

Overall, the current Crypto Assets market is at a critical period, and investors need to carefully weigh various factors to make strategic decisions.