The negative momentum is driven by a combination of factors, although experts do not agree on a single primary cause. Many point to rising geopolitical and trade tensions, the risk of escalation in the U.S.–Iran conflict, growing frictions between leading global economies, and new sanctions imposed by the White House. These developments are pushing investors toward traditional safe-haven assets, primarily precious metals. Digital tokens have failed to assume a protective role, despite earlier expectations that BTC and major altcoins could eventually serve as reliable stores of value. According to analysts, the market is now reassessing the role of digital currencies in the modern financial system, with many investors growing disillusioned as forecasts of strengthening prices and broad government-level adoption have not materialized. It is also worth recalling that during the election campaign, U.S. President Donald Trump promised to make BTC a state reserve asset.
Additional pressure has come from the ongoing decline in U.S. technology stocks, which has lasted for more than a week. Economists fear that the peak of investment in artificial intelligence and cloud technologies may already be behind us, increasing pressure on equities and closely correlated digital assets. Capital outflows are also being fueled by uncertainty surrounding future U.S. Federal Reserve policy. Last week, the Fed kept interest rates at 3.75%, citing economic stabilization and reduced risks to inflation and employment. At the subsequent press conference, Chair Jerome Powell noted that the likelihood of rate adjustments would increase if inflation returned to the 2.0% target or if the labor market began to cool—remarks interpreted as a signal that the current policy stance may persist in the medium term.
In addition, the nomination of Kevin Warsh as Powell’s potential successor unexpectedly faced resistance in the Senate. Despite his reputation as a conservative policymaker, Trump has stated that Warsh would nevertheless adopt a more dovish tone. Opposition from both Democratic lawmakers and some Republican rivals could significantly delay the leadership transition at the Federal Reserve. Against this backdrop, data from CoinGlass show that roughly $700 million in positions were liquidated early today alone, including about $530 million in long positions and $170 million in short positions. Market sentiment remains extremely negative, as reflected by the Fear & Greed Index, which has fallen to “9,” its lowest level since mid-2022 during the Terra blockchain collapse. Under these conditions, most major digital assets may continue to decline or shift into consolidation next week.
