Why is Crypto Market Down Today: Right Time to Invest or Not?

Key Reasons Why is Crypto Market Down Today and What Comes Next?

The world crypto market is colored red today after prices tanked across the board. The overall market capitalization is at $3.36 trillion, down 4.2% within the last 24 hours, according to CoinGecko. Daily volumes reached as high as $128 billion as fear and uncertainty struck the market.

Bitcoin price is at $103,521.82 as it fell by 2.05% today, with Ethereum falling by 4%. XRP also fell 2%, and Solana fell drastically by 6%. But what's actually behind this sudden market decline?

Why is Crypto Market Down Today?

Trump Tariffs on China: President Trump made a controversy again by doubling tariffs on foreign steel and aluminum imports to 50%. He accused China of violating a trade agreement and called the occurrence a "grave economic peril.".

Source: Truth Social 

The surprise maneuver froze US-China negotiations and sent financial markets, including equities and cryptocurrencies, into a frenzy of fear. Treasury Secretary Scott Bessent confirmed that negotiations have been paused. As a result, Bitcoin’s price plunged to $104,684.72 and Ethereum to $2,553. Even Dogecoin dropped nearly 10%, with total liquidations crossing $683 million.

Inflation Cools, But No Rate Cut Hopes: The Fed’s favorite inflation measure, the PCE Price Index, showed a mild increase of 0.1% in April. Core PCE also came in at 2.5% year-over-year.
While this might sound like good news, it wasn’t enough to boost hopes for a rate cut on June 18. Rising bond yields suggest that the market still believes interest rates will stay high—bad news for risk assets like crypto.

Bitcoin ETF Outflows Spike:  Another big blow came from Bitcoin ETFs. Over the last two days, investors pulled out more than $616 million, including $358 million on May 29 alone. This sudden outflow has added pressure to the already falling market, making investors even more nervous.

Source: SoSoValue

“Sell in May” Proving Right Again?: There’s a popular saying in the trading world: “Sell in May and go away.” That seems to be playing out now. In April, Bitcoin was up by 14.5%, but May saw a sharp reversal. So far in May 2025, BTC has been wiped out in the last week with an 8% decline.

Will Crypto Rise Again or Crash Further?

This is the big question. As of now, the fear and greed index has dropped from 66 (greed) last week to 50 (neutral) today. That shift suggests investors are becoming more careful. Some traders believe extreme fear creates buying chances, while too much greed means a crash is near.

Looking ahead, all eyes are on Fed Chair Powell, who will speak at the June 2 FOMC meeting. With Trump publicly pressuring for a rate cut, everyone is waiting to see if Powell hints at lower rates. If he does, the crypto might recover. But if the Fed keeps rates steady—or worse, hikes them—prices could fall further.

As a crypto analyst, I think the industry is still trying to find its footing. There’s no confirmed trend yet. It’s smart to wait and watch how global politics, rate decisions, and ETF flows shape up over the next week.

Conclusion

The crypto market is under pressure from Trump’s tariffs, inflation uncertainty, and big Bitcoin ETF outflows. With May’s mixed history and upcoming FOMC decisions, volatility may continue. Whether the sector rebounds or crashes further depends on what happens next Monday—so keep your eyes on the Fed. Always do your own research.