Crypto Market Crash Today: Why are Bitcoin and Altcoins Plunging?

Key Insights

• The crypto market crash accelerated today amid rising geopolitical risks.
• There are rising odds that the ongoing US-Iran war will take longer than expected.
• Bitcoin and Ethereum options worth billions will expire later today.

The crypto market crash continued today, March 27, with Bitcoin and most being in the red. Bitcoin dropped to $68,000 from this month’s high of $76,000.

Most altcoins were also much lower, with SIREN plunging by 60% and Worldcoin falling by 10%. Some of the other top laggards in the crypto market were tokens like Ether.fi, Pi Network, Pi Network, and Morpho.

Crypto Market Crash Driven by Iran War

The main catalyst for the ongoing crypto market crash is the ongoing Iran-US war, which continued today despite Donald Trump’s insistence that the two sides were talking. The three sides continued strikes against each other, with most analysts expecting more intense fighting in the coming weeks.

For one, most media reports say that President Donald Trump is sending thousands of military officers to the Middle East, possibly to take Kharg Island or to escort ships through the Strait of Hormuz.

As a result, the crypto market crash coincided with the ongoing rally in bond yields. The two-year yield rose to 4% for the first time in months. Similarly, the 10-year and 30-year yields rose to 4.5% and 5%, respectively.

Other assets continued their sell-off, with the futures tied to the Dow Jones and Nasdaq 100 dropped by over 100 points, while crude oil prices jumped.

The ongoing war has led to a sense of fear in the market, with the CNN Money Fear and Greed Index falling to the extreme fear zone of 16. The Crypto Fear and Greed Index has also remained in the fear zone of 35.

This fear has pushed more people to stay away from the market amid signs that the Federal Reserve will hike interest rates this year. A report released by OECD on Thursday showed that the US inflation will surge to 4.2% this year if oil prices remain elevated.

Upcoming Bitcoin and Ethereum Options Expiry

The crypto market crash is also being driven by the upcoming options expiry in the industry. Data shows Bitcoin options worth over $14 billion will expire later today. This is one of the biggest single-day expiries this year, with Bitcoin’s maximum pain being at $75,000.

At the same time, Ethereum options worth over $2 billion will expire on Deribit in the same period. Ethereum will have a maximum pain of $2,100.

Historically, Bitcoin and the crypto market tend to go through volatility ahead and after a major options expiry.

CLARITY Act Delay Concerns

The crypto market crash is also happening amid ongoing concerns about the CLARITY Act, also known as the Market Structure Bill.

This is an important bill whose main role is to separate the duties between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The main contract about the bill is that Coinbase and other top companies in the crypto industry have opposed a provision that bars them from offering yield to stablecoins on their platforms.

Banks have championed this provision, pointing that allowing stablecoin yields will lead to a run of capital from their institutions into companies in the crypto industry. Therefore, there is a likelihood that the bill will not be passed this year as crypto investors anticipate.

Bitcoin Price Bearish Flag Points to More Downside

Technicals are also contributing to the ongoing crypto market crash. As the three-day chart shows, the coin is now forming a bearish flag pattern, which typically signals a steeper decline. Most notably, the coin formed a similar pattern between October last year and January this year.

Bitcoin price has also failed to move above the key resistance level at $76,000. It has also remained below all moving averages and the Supertrend indicator.

Therefore, there is a risk that it will have a strong bearish breakout in the near term. Such a move will lead to more downside, potentially to $50,000. More altcoins will suffer the same fate.

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