Plain explanation: Why has Bitcoin fallen recently?

The recent fall of Bitcoin is not due to a single reason, but rather resembles several buckets of cold water being poured in succession, extinguishing the market's enthusiasm. Specifically, there are four key points:
1. The Federal Reserve poured a bucket of "the coldest water".
Bitcoin is now basically "eating according to the Federal Reserve's mood." Previously, the market thought there would be more rate cuts in December, and money would be more "loose," so many people increased their positions in advance, waiting for prices to rise. As a result, Federal Reserve Chairman Powell directly said, "Don't assume that there will definitely be rate cuts in the future," and it's still uncertain whether there will be a cut in December.
Once this was said, everyone's optimistic expectations were directly reversed. Previously, the probability of a rate cut in December was nearly 100%, but now it has dropped to around 60%. Coupled with the U.S. government shutdown, key economic data is unavailable, and investors are like drivers with their eyes closed, hesitant to touch high-risk assets like Bitcoin, opting to pull out investments and avoid risks for now.
2. Large institutions have taken the lead in "running away".
Previously, Bitcoin was able to rise mainly due to support from large institutions. However, recently institutions have begun to collectively cash out and exit, with the most obvious example being the Bitcoin spot ETF—this is the main channel for institutional entry. Last week alone, $607 million flowed out, directly wiping out the net inflow from the previous week.
From February until now, the total size of the Bitcoin spot ETF in the United States has shrunk from $40.7 billion to $35.9 billion, losing $4.8 billion in just one month. The products of leading institutions like BlackRock are experiencing daily outflows of funds, and even the premiums that were previously eagerly bought have turned negative, indicating that both large institutions and retail investors are selling rather than buying.
3. Technical indicators "flashing red lights" scare off investors
Those who understand the market are all paying attention to the "death cross" signal — which is when the short-term price average line falls below the long-term average line. This is usually seen in the market as a signal that the price is going to fall, and this time Bitcoin has just encountered this situation.
Moreover, key price levels have been breached one after another, falling from a high of $126,000 to around $107,000, a decline of over 15%. Technical investors see this situation and either rush to sell or dare not enter the market; with more people selling, the price naturally can't hold.
4. The hacker attack became the "last straw".
Just as the market was already in a panic, the decentralized trading protocol Balancer was suddenly attacked by hackers, resulting in total losses reaching $120 million. Although the officials said they would compensate, this hit everyone's pain point — there were already concerns about the technical security of cryptocurrencies, and now that something has really happened, people are even more afraid to hold on to them and quickly sold off to avoid risks.
This incident also triggered a chain reaction, with crypto-related stocks following the fall, and the confidence of the entire sector was hit. In addition, over 310,000 people were liquidated within 24 hours, resulting in a loss of 1.2 billion dollars, and the panic spread more widely, forcing more people to sell, creating a vicious cycle. #Gate新一期储备金报告出炉