3 Reasons Why Bitcoin and the Crypto Market Are Falling, According to Crypto Experts

Bitcoin and the broader cryptocurrency market have experienced another wave of decline, leaving investors asking the same urgent question: why is crypto falling right now?

Bitcoin, which often leads the entire crypto market, influences the direction of Ethereum and thousands of altcoins. When Bitcoin drops, the entire market tends to follow. According to crypto analysts and market experts, the recent decline is not random. It reflects a combination of macroeconomic pressures, investor behavior, and structural market dynamics.

Understanding these factors can help investors make smarter decisions and avoid emotional reactions during volatile periods. Below are the three main reasons crypto experts say Bitcoin and the crypto market are falling.

Macroeconomic Pressures Fuel Bitcoin Price Drop

Experts attribute much of the crypto market fall to broader economic headwinds. Geopolitical tensions escalate, with U.S.-China trade disputes intensifying under new tariffs. These developments foster a risk-off environment where investors flee volatile assets like Bitcoin.

ABC News reports that looming uncertainty prompts momentum-driven selloffs, amplifying downward pressure as leveraged positions liquidate. Reuters highlights $2.5 billion in Bitcoin liquidations triggered by this volatility, linking it to sell-offs in equities and precious metals.

The labor market slows, with inflation lingering above the Federal Reserve's 2% target. This economic slowdown erodes investor confidence. David Siemer, CEO of Wave Digital Assets, notes elevated price-to-earnings ratios and weakening global indicators as short-term risks. Bitcoin, often viewed as digital gold, fails to act as a hedge.

Instead, capital rotates to traditional safe havens like actual gold and cash. Nigel Green, CEO of deVere Group, emphasizes dollar strength's role, given Bitcoin's historical negative correlation with a strong U.S. dollar. This shift underscores how macro factors override crypto-specific narratives.

Tech sector woes compound the issue. Disappointing earnings from the Magnificent Seven companies crack the AI narrative. Jasper de Maere, desk strategist at Wintermute, identifies this as a key trigger for Bitcoin's breakdown.

Microsoft's weak cloud growth and rising AI costs unsettle broader risk assets. Deriv analysts observe U.S. equities stumbling, with the Nasdaq dropping 1.4%, pulling crypto down in tandem. These elements create a cascading effect, where economic uncertainty directly impacts crypto valuations.

Regulatory Uncertainty Hinders Crypto Market Recovery

Regulatory hurdles stall progress in the crypto space, exacerbating the market decline. The Clarity Act, intended to provide market structure rules for crypto trading, faces delays in becoming law. Juan Leon, senior investment strategist at Bitwise, stresses its importance for institutional adoption. Without clear regulations, investors hesitate, leading to reduced inflows and heightened volatility.

Fortune reports that the bill's stumbling path to presidential signature weighs on investor minds. This uncertainty deters new capital, as institutions await a stable framework. X posts from analysts like Altcoin Daily warn of Clarity Act issues as catastrophic for the bull case in early 2026. The lack of progress signals to markets that crypto remains in regulatory limbo, prompting sell-offs.

Government shutdown risks add another layer. Potential U.S. government disruptions tie into broader fiscal concerns, further eroding confidence. Experts like those at Seeking Alpha note profit-taking and shifting macro expectations as contributors to the meltdown. Regulatory inaction amplifies these effects, as the sector lacks the safeguards needed to attract sustained investment.

Michael Burry warns of cascading effects from Bitcoin's plunge, arguing it exposes the asset's speculative nature without organic use cases. This perspective resonates amid stalled legislation, where the absence of clear rules leaves crypto vulnerable to external shocks.

Federal Reserve Shifts Drive Crypto Decline Reasons

Changes in Federal Reserve leadership and policy expectations play a pivotal role in the crypto downturn. President Trump's nomination of Kevin Warsh as Fed chair introduces uncertainty. Warsh's hawkish stance suggests fewer rate cuts, keeping interest rates elevated.

Reuters connects this to crypto's slump, as markets anticipate tighter monetary policy. Wintermute's de Maere labels it a confluence factor, alongside tech earnings and metals unwind.

High rates draw capital to safer yields like bonds, draining liquidity from crypto. X analyst Novaria points to the hawkish Fed and Warsh nomination killing liquidity hopes. This environment fosters risk aversion, with Bitcoin behaving like a high-beta tech asset rather than a safe haven.

Quantitative tightening continues to remove liquidity, intensifying the bleed. Ayo on X explains how FOMC meetings spike volatility, often leading to sell-the-news reactions even on positive headlines. The leadership transition heightens this, as markets price in prolonged high rates.

ETF outflows reflect this sentiment. Reports show over $1 billion in outflows, with whales and institutions rotating out. Jacob King on X notes record Bitcoin ETF outflows amid the plunge. This drains passive demand, accelerating the decline.

Investopedia highlights Bitcoin's drop below $70,000, tying it to risk asset retreats and defensive portfolio shifts. Fed uncertainty thus acts as a catalyst, pushing crypto into capitulation.

These three reasons—macroeconomic pressures, regulatory uncertainty, and Federal Reserve shifts—interlink to drive the current crypto market fall. Experts like those at MEXC and Yahoo Finance warn of potential further pain if Bitcoin breaches key supports like $74,500. Yet, some see opportunity in this reset. K33 analysts argue the market lacks the structural stress of past crashes, suggesting a rebound for utility-driven projects.

BitmonkCrypto on X observes the cycle evolving, with Bitcoin syncing to global liquidity. Investors should monitor macro indicators and DCA strategically. While the downturn tests narratives, it may pave the way for a more mature market.

The Motley Fool quotes analysts like Alex Kuptsikevich, noting cryptocurrencies no longer hedge against fiat policies, with capital favoring gold and silver. Matt Howells-Barby at Kraken links AI investment concerns to unsettling risk assets. This shift highlights Bitcoin's vulnerability.

Greenwich Time reports Bitcoin hitting 15-month lows at $67,000, with related stocks like Coinbase and Riot Platforms dropping sharply. The sector's interconnectedness amplifies losses.

Recovery hinges on resolving these issues. Clear regulations, Fed clarity, and economic stabilization could spark a turnaround. Until then, caution prevails.

In summary, experts agree the fall stems from external pressures rather than crypto fundamentals. Investors who adapt to this macro-driven reality position themselves for future gains. Stay vigilant as 2026 unfolds.