Cryptocurrencies record an average decline of over 10% until early morning on the 25th, with predictions of a US interest rate freeze, boring sideways trading, and exchange hacking .
Experts analyze that “after boring sideways trading, a sharp drop has occurred, and it was going to explode.”
The cryptocurrency market, including Bitcoin (BTC), plunged on the morning of the 25th amid a number of negative factors. With Bitcoin down about 5% from the previous day, many major altcoins recorded declines of over 10%, causing widespread fear in the market.
The main reasons for the decline in the cryptocurrency market include the Bybit hack, the Federal Reserve’s (Fed) interest rate freeze prediction, and the continued sideways trend of surrender selling.
Recently, in the asset market, based on the Fed’s repeated announcements of an interest rate freeze, gold, a ‘safe asset’, has been hitting new highs every day, while cryptocurrencies, a ‘risky asset’, have been falling every day.
Since President Trump’s inauguration in January, most altcoins have fallen by more than 20%, including Bitcoin’s decline of about 15%. The buying trend that had risen due to expectations of policy changes following the emergence of a cryptocurrency-friendly administration has turned into selling trend due to the unexpectedly quiet actions of the Trump administration.
In particular, the Bybit hacking incident, which coincided with the boring sideways trend, is pointed out as the cause of the market’s plunge.
The cryptocurrency market continued a boring sideways trend for about a month. As the weak consolidation continued without any significant changes and investor fatigue was increasing, the largest-ever exchange hacking incident occurred, turning investor fatigue into fear.
Earlier, Bybit was hacked by what is believed to be the North Korean hacker group ‘Lazarus’ on the 21st. Bybit’s hacking incident is considered the largest-scale hacking incident ever, surpassing the Mt. Gox incident in 2014 (470 million USD) and the Poly Network incident in 2021 (611 million USD).
Although Bybit announced that it would recover the volume through large-scale loans and over-the-counter (OTC) markets, fear over the hacking gripped the market.
According to data from the on-chain analysis platform DeFirama on the 24th, Bybit’s asset value decreased by about $5.3 billion (about 7.6044 trillion KRW) after the hacking. Considering that the amount stolen through the hack was approximately $1.46 billion, Bybit also suffered significant damage from a ‘bank run’ in which users rapidly withdrew their assets after the hack.
Experts say that the boring sideways trend eventually burst.
Cryptocurrency media outlet Cointelegraph reported on the 24th that “Bitcoin’s volatility is nearing its lowest level ever.”
On-chain data analysis firm Glassnode said that “Bitcoin’s one-week realized volatility has fallen to 23.42%, reaching its lowest level ever,” and that “there has been a drastic change in the market since the period of low volatility in the past.” The cryptocurrency market, which
had been suffering from a sharp selloff, is rebounding on the morning of the 25th on the back of a low-price buying trend. As of 9:50 am on the 25th, Bitcoin is trading at 134.56 million won on Upbit.
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