Crypto prices usually fall together for a handful of repeat reasons: interest rate news, falling stock markets, big holders selling, traders being forced out of borrowed positions, exchange failures or hacks, and regulation news. To find today's cause, check reputable financial news rather than social media, because the reason changes from one crash to the next.
This page is evergreen, so I can't tell you what's moving the market this morning. What I can do is explain the triggers that come up again and again, so you can read the headlines with a clearer head.
Crypto is a young market that trades around the clock, with many small traders and a lot of strong opinions. That mix makes big swings common. A fall that would make news in the stock market can happen in a day in crypto.
There's rarely just one cause. Usually a single shock starts the fall, and then others pile on as people sell out of fear. That's why a crash can look much bigger than the news that started it, and why the explanation often only becomes clear days later.
The usual triggers
Interest rate and economic news
When central banks raise interest rates, or hint that they might, safer assets such as savings and bonds look more attractive. Money often moves out of riskier assets, and crypto is usually in that group. Inflation reports and jobs figures can move the market for the same reason.
Falling stock markets
Crypto has often moved in step with share prices, especially technology shares. When investors get nervous about the economy, they tend to sell what's risky first. A wobble in shares can spill straight into crypto.
Big holders selling
A small number of wallets hold a large share of some coins. When one of them sells a lot at once, the price can drop quickly, and other people sell because they see it falling. Traders often call these large holders whales.
Traders being forced out of borrowed positions
Some traders use borrowed money, called margin, to take bigger bets. If the price moves against them, the platform sells their position automatically. This is called liquidation. When many positions are closed at once, the selling pushes the price down further and triggers more liquidations. It's a common reason for sudden, steep drops.
Exchange failures and hacks
If a major exchange gets hacked, freezes withdrawals or collapses, trust drops across the market. Even people who don't use that exchange sell, because they worry the same thing could happen elsewhere.
Regulation and legal news
News of a ban, a crackdown or a court case can shake prices, particularly if it involves a large country or a well-known company. Good news about regulation can lift prices too, but the market often reacts to the unknown first.
How to check what's happening right now
- Price trackers. CoinGecko and CoinMarketCap show prices, market size and which coins are falling the most. They tell you what is happening, not why.
- Reputable financial news. Look for outlets with named reporters and corrections policies. They'll usually explain the cause once it's known.
- Official exchange status pages. If an exchange has trouble, it normally posts updates there first.
- Central bank and regulator announcements. Interest rate decisions and regulator statements are published on their own websites.
- Be wary of social media. Rumours, panic and scams spread fast during a crash.
Reading the news is only the start. If you're new to the space, this beginner's guide to Web3 gives helpful background on how the wider technology fits together.
Crashes we've seen before
In 2018, prices fell for most of the year after the excitement of the previous year faded. Many coins lost most of their value, and it took a long time for the market to recover.
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In 2022, several things happened close together. A well-known stablecoin called TerraUSD lost its peg in May, and its sister coin Luna collapsed. Lenders and funds that were exposed to it ran into trouble. Then in November the exchange FTX collapsed and filed for bankruptcy, which hit trust across the whole market.
The details differ, but the pattern is familiar: rising nervousness, a shock, forced selling and then a long period of low confidence. Past patterns don't predict the next one, but they do show that sharp falls are part of this market.
Triggers at a glance
| Trigger | What it looks like | How long it tends to matter |
|---|---|---|
| Interest rate news | Gradual falls, often across stocks too | Weeks to months, depending on the economy |
| Falling stock markets | Crypto drops on the same days as shares | A few days to several weeks |
| Big holders selling | A sudden, sharp drop on one coin | Usually days |
| Liquidations | A fast, steep fall, then a partial bounce | Hours to a few days |
| Exchange failure or hack | Panic, frozen withdrawals, wide falls | Weeks, and trust can take far longer to return |
| Regulation news | Sharp reaction, then a slower settling | Days to months |
The right-hand column is a rough guide in words. Every crash plays out differently.
What not to do in a crash
- Don't borrow money to buy more because prices look low.
- Don't act on a tip from a stranger, a group chat or a social media account.
- Don't send money to anyone who promises to recover your losses. Recovery scams target people who have just lost money.
- Don't share your seed phrase or passwords with anyone, however official they sound.
- Don't make big decisions in a panic. Take a break first.
Questions to ask yourself before you act
- Could I afford to lose all the money I put in?
- Is this money I might need soon?
- Do I understand what I own, and why I bought it?
- Am I reacting to a headline, or to my own plan?
- Do I need to speak to a regulated adviser about my situation?
If you work in crypto and want to share what you know, here's how to write for my crypto section.
This is general information, not financial advice. Check the details with a qualified, regulated professional before you decide anything.
Frequently asked questions
Why does crypto fall when stocks fall?
Many investors treat crypto as a risky asset, so when they get nervous they sell it alongside shares. That's why the two often drop on the same days, though they don't always move together.
Does a crash mean crypto is dead?
No. Crypto has fallen sharply several times before, including in 2018 and 2022, and it has kept going each time. A past recovery isn't a promise of a future one, but a fall alone doesn't end the market.
How can I find out why crypto is falling today?
Check the main price page on CoinGecko or CoinMarketCap, then read a reputable financial news outlet for the cause. Be careful with social media, where rumours spread faster than facts.
Should I sell when prices crash?
I can't tell you that, and nobody who doesn't know your finances can. Decide using your own plans, how much you can afford to lose and, if you want advice, a regulated adviser.
