Why Crypto Market Is Down Today: Is FOMC Meeting 2025 the Reason?

Why Crypto Market Is Down Today: FOMC Meeting 2025 or DeepSeek Crypto?

The global cryptocurrency market faced a significant downturn today, with the total market cap plunging by 6.97% to $3.36 trillion. This decline coincided with a massive spike in trading volume, up 75.36% in the past 24 hours, reaching $140.81 billion. Notable cryptocurrencies like Bitcoin, Ethereum, XRP, Solana, and Dogecoin also recorded substantial declines, fueling widespread concerns among investors.

Why Crypto Market Is Down Today: Reasons Behind the Crypto Crash

The ongoing crypto crash stems from a combination of macroeconomic factors, market sentiment, and external developments:

1. Fed Meeting News and FOMC Meeting 2025: Investors are eyeing the upcoming Federal Reserve’s FOMC meeting on January 28-29, with traders anticipating no signs of a rate cut. Robust U.S. economic data has reduced the need for monetary easing, adding pressure on risk assets like cryptocurrencies. The uncertainty surrounding the Fed’s stance has fueled a sell-off, mirroring a 2.15% decline in U.S. stock futures.

2. DeepSeek Crypto Innovation: Market sentiment took a hit following news that Chinese AI company DeepSeek developed a low-cost AI model challenging expensive systems like OpenAI. This innovation raised bearish sentiment on tech stocks, particularly Nvidia, dragging down the broader market, including cryptocurrencies.

3. Robert Kiyosaki Market Crash Prediction: Renowned author Robert Kiyosaki’s prediction of the "biggest stock market crash in history" for February 2025 has also shaken confidence. He forecasts a shift from traditional stocks to alternative assets like Bitcoin, gold, and silver, emphasizing Bitcoin’s resilience during market instability. Despite his bullish stance on Bitcoin, the short-term outlook remains volatile.

4. Liquidations and Market Volatility: In the past 24 hours, over 254,000 traders were liquidated, with $698 million wiped out, predominantly from long positions. The largest single liquidation occurred on HTX, totaling $98.46 million, underscoring the fragility of the current market.

Fear and Greed Index Highlights Investor Sentiment

The Fear and Greed Index, a key sentiment indicator, has shifted from "Extreme Greed" (76) last week to "Greed" (71) today. This decline reflects growing caution among investors as market corrections unfold. 

Historically, excessive greed often signals an imminent correction, which aligns with the recent crypto downturn. Conversely, extreme fear in the market is viewed as a buying opportunity for contrarian investors.

What is Going on With Crypto Today?

At the time of writing, Bitcoin remains under pressure at $99,281.19, with a $1.96 trillion market cap and $50.27 billion in 24-hour trading volume. Ethereum fell 7.85%, hovering at $3,070.84. XRP, Solana, and Dogecoin have also suffered steep losses. The broader market awaits clarity from the FOMC meeting and further developments around DeepSeek’s AI breakthrough. While the crypto market endures this turbulent phase, the combination of macroeconomic uncertainty and shifting investor sentiment underscores the importance of cautious trading and diversification.