Understanding Today’s Decline in the Cryptocurrency Market

The cryptocurrency market dropped over 4.50% to $2.414 trillion, driven by a sell-the-news reaction to Ether ETF approvals, resulting in significant liquidations and pressure from FOMC minutes reflecting tightening monetary policy.

On May 24, the cryptocurrency market’s net capitalisation fell by over 4.50%, dropping to $2.414 trillion. The decline primarily affected leading cryptocurrencies, with Bitcoin and Ether seeing notable losses, particularly following the U.S. SEC’s approval of eight Ether exchange-traded funds (ETFs). This reaction typifies a “sell-the-news” sentiment, where anticipation of good news leads to increased prices prior to the announcement, only for traders to subsequently sell the news.