Why is the crypto market falling? Two major factors fuel uncertainty

One look at the crypto market makes it clear: the entire market turns deep red. Bitcoin (BTC) and Ethereum (ETH) are down 1.2% and 2.9% respectively in the past 24 hours. Where does this sudden pessimism come from, especially after last week’s significant gains?

Geopolitical tensions

Several factors may be at play, including ongoing geopolitical tensions, specifically between Israel and Iran. On the night from Friday to Saturday, two Iranian soldiers fell during Israeli air strikes on Iranian targets, the Iranian army reported via the TASNIM news agency. These attacks were in response to a recent Iranian attack on Israel, in which two hundred rockets were fired.

The escalation of this conflict fuels fears of further tensions, which is also expected to impact the crypto and stock markets.

Possible research into Tether

Another source of unrest is the rumor that the US government may be investigating Tether, the issuer of the popular stablecoin USDT. Although Tether CEO Paolo Ardoino has denied these reports, The Wall Street Journal reports that federal authorities may be investigating whether Tether violated sanctions and anti-money laundering rules. With a crucial role in the crypto market and a market capitalization in the billions, any change surrounding Tether could have major consequences.

Fear and greed in the market

The uncertainty in the market is also reflected in the Fear and Greed Index, which now stands at a neutral score of 50. This indicates an uncertain atmosphere within the sector, while this index has shown much higher sentiment in recent weeks.

In short, the combination of geopolitical tensions and possible legal issues surrounding Tether creates a tense atmosphere on the crypto market.