Cryptocurrency market drops 11%: What caused the sudden sell-off and what will happen next?

The cryptocurrency market has experienced a sharp decline, losing 11% of its value in just a few days. The combination of global economic challenges and internal cryptocurrency issues has contributed to this significant recession. Weak economic data, such as disappointing earnings in the tech sector and growing fears of a global recession, have triggered a widespread sell-off in risky assets. Exacerbating these problems, the Bank of Japan's surprise decision to raise interest rates created a bearish momentum across Asian and U.S. financial markets, further damaging investor confidence. On the cryptocurrency front, the market has faced additional pressure from specific developments. Reports indicate that Mt. Gox creditors have started reclaiming their Bitcoin, potentially flooding the market with additional supply. Adding fuel to the fire, speculation that the US government is preparing to move or sell some of its Bitcoin reserves has led to panic among traders. Furthermore, a prominent trading company, Jump Crypto, is said to have liquidated a large amount of cryptocurrency assets, further exacerbating the downward trend. This combination has erased about $480 billion in market value in four days, marking one of the most important corrections of the year. Crypto Fear & Greed Index has dropped to the "fear" zone, indicating that investor sentiment has clearly turned negative. The current state of the market has raised questions for traders and investors about what will happen next, as volatility continues to dominate and recovery seems uncertain.