Crypto in Slump: 3 Reasons Why Bitcoin, Ethereum and Dogecoin Are Struggling

The cryptocurrency market is facing a rough patch, with major tokens like Bitcoin, Ethereum, and Dogecoin all sliding in value. Investor sentiment is being hit by a combination of macroeconomic uncertainty, liquidations, and upcoming market events, wiping billions off the overall market and showing how quickly digital asset prices can fluctuate.

Bitcoin, Ethereum and Dogecoin Under Pressure

At the time of writing:

• Bitcoin is trading at $109,549.23, down 6.14% over the last week. While long-term holders remain steady, short-term traders are reacting sharply, amplifying volatility.

• Ethereum has declined by 13.09%, trading at $3,943.35, largely due to outflows from Ether-based ETFs as institutional investors turn cautious.

• Dogecoin, the memecoin, has fallen 17.30% over the past week, reflecting its susceptibility to sudden sell-offs.

According to CoinSwitch Markets Desk:

“The broader crypto market consolidated in red yesterday as lower-than-expected U.S. jobless claims tempered hopes of near-term Fed rate cuts. While risk-off sentiment has driven a wave of liquidations, spot buyers are stepping in with larger allocation sizes.”

3 Reasons Why Crypto Is Down

1. Government Shutdown Fears Hit Sentiment

Rising concerns over a potential US government shutdown have unsettled global financial markets, reducing investors’ risk appetite. Uncertainty around policy and fiscal decisions has prompted traders to pull back from volatile assets like cryptocurrencies.

2. Mass Liquidations Amplify the Decline

A wave of liquidations has dragged prices down further. In the past 24 hours alone, over $1.6 billion worth of leveraged positions were wiped out. Most of these were long bets placed by traders expecting price gains. Their forced liquidation triggered a chain reaction, increasing downward pressure on Bitcoin, Ethereum, and Dogecoin.

3. Options Expiry Adds to the Pressure

The upcoming expiry of billions of dollars in Bitcoin and Ethereum options is creating additional market stress. Traders are adjusting positions ahead of expiry, leading to higher volatility. With so much capital tied up in these contracts, even small price movements can trigger large-scale reactions.

The Road Ahead

While the market faces short-term challenges, analysts note that spot buyers are stepping in, indicating potential support levels. For cautious investors, this slump is a reminder of the high-risk, high-volatility nature of cryptocurrencies.