Why is the Crypto Market Crashing Constantly?

Jakarta, Pintu News – The cryptocurrency market is facing a dark period, with the price of altcoins such as Ethereum (ETH) experiencing a drastic drop in early 2025. Meanwhile, gold recorded a significant surge in value.

This phenomenon has led many investors to start questioning whether the crypto era is over. This article will dissect the main causes of the crash, the influence of macroeconomic policies, and the chances of a future reversal according to Michael van de Poppe’s analysis!

Ethereum (ETH) plunges, gold becomes the favorite

Ethereum (ETH) plummeted more than 44% in the past quarter, the worst period since 2018. Meanwhile, gold prices surged by more than 20% in the same period.

If converted, in the last three months, gold has risen by around IDR67,000 per gram, while ETH continues to lose value against Bitcoin (BTC). This indicates a shift in sentiment from high-risk assets to safe-haven assets like gold.

The trend shows that investors are moving away from crypto and seeking refuge in more stable assets. The trigger is a combination of global economic uncertainty and declining interest in altcoins.

In fact, interest in new projects such as Pepe Coin (PEPE) and other coins has also dropped dramatically. This further emphasizes that the cryptocurrency market is in a major correction phase.

Read also: Pay for Franchise with Bitcoin (BTC)? FAT Brands Officially Accepts Crypto Payments!

Macroeconomic Policies Trigger Crypto Market Turmoil

The tariff and trade policies implemented by former US President Donald Trump have once again brought uncertainty to the global economic landscape.

This new approach sparked concerns in the market, causing investors to avoid riskier assets such as crypto. A weakening US dollar and pressure on bond yields further compounded this situation.

Macroeconomic sentiment plays an important role in altcoin performance. In times of global uncertainty, the conservative nature of gold is increasingly sought after.

This creates additional pressure for Ethereum (ETH) and other altcoins, which are still considered speculative assets. As a result, investors are hesitant to invest in the crypto market.

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Gold and Ethereum Correlation: Who Has the Edge?

Ethereum (ETH) and gold have shown an interesting relationship in previous market cycles. When gold consolidates or stagnates, ETH usually outperforms.

However, gold is currently overbought, while ETH continues to fall against Bitcoin (BTC), even by 70% since the end of 2022.

This shows that the crypto market is now starting to mature by following global macroeconomic trends. Ethereum and other altcoins are no longer only influenced by community sentiment but also external factors such as fiscal policy and labor data.

Read also: Will Trump’s Tariffs Shock the Crypto Market?

Market Psychology and Rebound Hopes

According to the “Wall Street Cheat Sheet” theory, altcoins are currently in the “Depression” phase, when prices are at their lowest and investor confidence is very low. However, history shows that this phase is actually a turning point towards the recovery phase. This is a golden opportunity for investors who dare to enter when prices are low.

However, recovery takes time and support from external factors such as falling gold prices or easing economic policies.

Ethereum (ETH) is currently showing signs of bullish divergence, which could indicate a trend reversal in the near future. However, investors are reminded to remain cautious and focus on projects with strong fundamentals and real value.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• YouTube Michael van de Poppe. Why Do Altcoins Keep Crashing?. Accessed April 5, 2025.
• Featured Image: Generated by Ai