Crypto Crash: Bitcoin Nears $90K as Market Cap Plummets Below $3T

The cryptocurrency market has witnessed a significant downturn in the past 24 hours, with the total market capitalization plummeting below the critical $3 trillion mark to $2.98 trillion. This sharp decline of over 7% suggests a potential further slide in crypto prices. Market sentiment has turned increasingly bearish as Bitcoin inches closer to the psychological level of $90,000. If Bitcoin fails to hold above this mark and drops lower, it could trigger an even more severe crash, dragging altcoins further into the red.

The overall crypto market is experiencing a broad sell-off, with Bitcoin, the leading indicator of crypto sentiment, struggling. Historically, altcoins tend to crash harder and recover slower than Bitcoin, leading to increased fear among investors. The Federal Reserve's quantitative tightening (QT) policies have made risk assets like cryptocurrencies less attractive, leading to more sell-offs. Additionally, uncertainty remains about whether the "Strategic Bitcoin Reserve" plan will be implemented, which could provide a massive boost to Bitcoin but has yet to materialize.

The correlation between the crypto market and traditional financial markets remains strong. Last week, the S&P 500 experienced its worst day in two months, falling by nearly 2%. A weak stock market often translates to a weak crypto market, as institutional investors adjust their risk exposure. A recent security breach at Bybit, a major crypto exchange, has heightened fear among investors. Many traders are now hesitant to enter the market, reducing overall buying pressure and leaving prices vulnerable to further declines.

The market-wide decline has hit some cryptocurrencies particularly hard. Raydium (RAY) took a massive hit, leading the crash among altcoins with a 30% drop. Lido DAO (LDO) suffered heavy losses as DeFi tokens faced increased selling pressure, falling by 18%. The meme coin frenzy cooled down, causing BONK to drop significantly by 17%. The political token hype faded, leading to a sharp decline of 16% for TRUMP. Pyth Network (PYTH) saw a steep sell-off as confidence in the market waned, dropping by 15%. As the crypto market remains volatile, traders are closely watching Bitcoin's $90,000 level. If further downside is seen, expect more pain ahead for altcoins and the entire market.