The recent crypto crash continued on Monday as Bitcoin and most altcoins remained in the red amid rising geopolitical jitters. Bitcoin dropped to $87,380, while Ethereum, Dogecoin, Solana, and XRP fell by over 3% in the last 24 hours.
Crypto crash continues as liquidations jumped
One key reason behind the ongoing crypto market crash is that liquidations continued rising. Data compiled by CoinGlass shows that liquidations soared by 770% in the last 24 hours to $678 million.
Ethereum liquidations jumped to over $218 million, while Bitcoin liquidations jumped to $195 million. Solana liquidations jumped to $63 million. The other top liquidated tokens were XRP, Zcash, and Dogecoin.
Liquidations happen when crypto exchanges close leveraged trades when their losses jump and reach the margin level. They close these trades to protect the capital they lend to the traders.
The ongoing liquidations surge coincided with the decline in the futures open interest. Data shows the open interest dropped by 2.15% on Monday to $128 million, down from the October high of over $255 billion.
Open interest refers to the outstanding options contracts in the crypto industry. A higher figure is a sign of higher demand for cryptocurrencies.
Geopolitical jitters are rising
The crypto crash is happening amid the ongoing geopolitical jitters in the United States and other countries. First, there are signs that the United States will attack Iran this year now that Donald Trump has sent an armada of warships in the region.
Such a move would lead to higher oil prices and the biggest geopolitical crisis in the Middle East. Data compiled by Polymarket shows that the odds of an attack by June have jumped to 65%.
At the same time, Donald Trump has threatened Canada with huge tariffs because of its recent deal with China. The deal will see China export up to 49,000 vehicles to Canada a year and pay a 6% tariff, down sharply from 100%. This move will benefit top Chinese companies like BYD and Nio.
US government shutdown odds are rising
The crypto market crash is also happening because of the ongoing jitters on the US government funding. Polymarket data shows that the odds of a government shutdown jumped to over 70%.
These odds rose as protests continued in the past few days after a Border Patrol Agent shot and killed an American. A government shutdown would affect the ongoing economic recovery and lead to more volatility in the market.
The shutdown jitters are rising ahead of the upcoming Federal Reserve interest rate decision. Economists expect the bank to leave interest rates unchanged between 3.50% and 3.0%.
Bitcoin price technicals
The ongoing crypto market crash is also happening because of Bitcoin’s weak technicals. The daily timeframe chart shows that Bitcoin has remained below all moving averages and the Supertrend indicator. That is a sign that bears have remained under pressure.
Bitcoin has also formed a bearish flag pattern, which happens after a major dip, which is then followed by a consolidation.
Therefore, there is a likelihood that the BTC price will have a strong bearish breakout, which may lead to more downside among altcoins.