Why Is Crypto Dropping And How Do You Deal With It?
A crypto drop occurs when the price of a cryptocurrency decreases in value. This can be a short-term, temporary dip or a more frequent movement across the entire market. Drops are normal in the volatile crypto market, even major drops can happen during a bull market. That’s why traders shouldn’t always fear a crypto drop: it’s simply part of the game.
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🕒 6:33 PM
📅 Nov 12, 2025
✍️ By chrison2
°A crypto drop happens when selling pressure outweighs buying interest and can be either temporary or structural.
°Macro-economic factors, regulations, negative news, liquidations, and market psychology all play a big role in declines.
°There are different types of drops like dips, corrections, and crashes, each with its own scale and context.
°Drops also occur during bull markets and can even be part of a healthy market structure.
°How you handle drops depends more on your strategy, risk management, and emotional control than on predicting the market.
°Why is crypto dropping?
Crypto drops when selling pressure becomes stronger than buying interest. This is usually influenced by several factors, such as interest rate hikes, regulations, negative news about hacks or bankruptcies, or even liquidations. A drop is often the result of multiple events happening at the same time. These are the main factors:
Macro-economic factors: Interest rate hikes, inflation data, and fears of recession make crypto investments less appealing for some. When the Federal Reserve repeatedly raised rates in 2022, Bitcoin fell from around $69,000 to $17,000 within a year as risk assets became less attractive.
Regulations and policy: New laws, bans, or lawsuits create uncertainty and selling pressure. In June 2023, the price of Ethereum dropped significantly after the SEC filed lawsuits against Binance and Coinbase, which sparked uncertainty in the market.
News and sentiment: Hacks, bankruptcies, and other negative events damage trust and increase panic. During the FTX collapse in November 2022, Bitcoin lost over 20% in just a few days and Ethereum dropped more than 30% due to panic selling.
Liquidations and leverage: Since many traders use leverage, positions can automatically be liquidated during downturns, causing extra downward pressure. On August 19, 2023, a sudden BTC drop below $25,000 triggered over $1 billion in forced liquidations, amplifying the fall even further.
Behavior and psychology: Panic, herd behavior, and emotional decisions make drops worse. In May 2021, after Elon Musk posted negative tweets about Bitcoin, a large part of the market sold in panic even though Bitcoin’s fundamentals hadn’t changed at all.