The crypto market is enduring dark red days: both Bitcoin (BTC) and altcoins have seen significant declines overnight. The prevailing atmosphere of uncertainty is clearly reflected by the Crypto Fear & Greed Index, which, at a score of 22, indicates a state of "extreme fear". This anxiety is fuelled not only by internal market corrections but also by rising macro-economic and geopolitical tensions, particularly those originating in the United States.

Bitcoin (BTC) Price Continues to Drop

Bitcoin's decline is sharp and sustained; this marks the fourth consecutive day the price has fallen. The price dipped below the crucial support level of $110,000 yesterday, which accelerated the sell-off. Following a brief recovery to $109,000, the price has once again fallen over the last few hours.

Bitcoin is currently valued at just over $106,000. This represents a decline of 4.28% over 24 hours and a loss of no less than 12.46% compared to last week. Since the peak of over $126,000 recorded last Monday, the price has dropped by a sharp 16%.

Altcoins Hit Harder: Declines for XRP and SOL

While this period is challenging enough for the Bitcoin price, altcoins are bearing the brunt of the losses. Their declines are far sharper, indicating widespread panic in the market. Major coins are under severe pressure: Ethereum (ETH) dropped 5.32% and is hovering just below the key $3,800 level, with $3,600 potentially being the next stop.

Furthermore, other major altcoins recorded significant losses: Ripple (XRP) lost 6.36%, Solana (SOL) dropped 7.29%, and Cardano (ADA) even showed an 8.20% decline. There are also many coins showing double-digit losses. Even big names such as Sui (SUI), Avalanche (AVAX), and Hedera (HBAR) fell by more than 10%. The biggest decliner is Zcash (ZEC) with a 20.25% loss over the past 24 hours.

Macro-Economic Factors: US Banks and China Trade War Cause Instability

The turmoil in the crypto market is directly linked to macro-economic and geopolitical developments. The market is moving in tandem with these macro-economic headlines, according to analysts.

Fears over US bank stability:
Disclosures regarding bad loans at US regional banks, such as Zions Bancorp and Western Alliance Bancorp, are causing significant unease. Fraud cases involving these borrowers have led to substantial losses and raise questions about the stability of smaller US banks.
Trade war with China escalates:
President Donald Trump confirmed that the US is indeed engaged in a trade war with China. He had previously threatened a 100 per cent tariff on all Chinese products, an escalation which is weighing down global sentiment.

Outlook: Cautious Optimism Prevails

Despite the widespread fear, analysts still see signs of cautious optimism and potential catalysts for recovery. For instance, analysts observed that Bitcoin and Ethereum recovered slightly from their lowest points of the day. This points to selective 'dip-buying', which suggests some investors still have confidence in the market floor, although the overall sentiment remains fragile.

Furthermore, Nick Ruck of LVRG Research warns that a further escalation of the trade war or new banking problems could push the Bitcoin price below the psychological $100,000 mark. For a strong rebound in the fourth quarter, the market is looking for new catalysts. These include interest rate cuts by the US Federal Reserve or the approval of additional crypto ETFs.

Until then, the market remains in a precarious balance, and uncertainty over banks and geopolitical tensions will ensure price movements remain sharp and unexpected.

Disclaimer: This is not financial advice. Always consider conducting your own research and seeking professional advice before investing.