Plain language interpretation: 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 continuously poured on it, extinguishing the market's enthusiasm. Specifically, there are four key points:
1. The Federal Reserve poured a basin of "the coldest water".
Bitcoin is now basically "eating according to the Federal Reserve's mood." Previously, the market thought there would be further rate cuts in December, and money would be more "loose," leading many to increase their positions in anticipation of a price 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.
As soon as these words came out, everyone’s optimistic expectations were directly reversed. Previously, it was thought that the probability of a rate cut in December was almost 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 driving with their eyes closed, not daring to touch high-risk assets like Bitcoin, choosing to withdraw funds and avoid risks first.
2. Large institutions have taken the lead to "run away".
Previously, Bitcoin was able to rise mainly due to support from large institutions. However, recently institutions have begun to collectively cash out and leave the market, with the most obvious example being the Bitcoin spot ETF—this is the primary channel for institutions to enter the market. Last week alone, there was a capital outflow of $607 million, which directly wiped out the net inflow from the previous week.
From February until now, the total size of the U.S. Bitcoin spot ETF has shrunk from $40.7 billion to $35.9 billion, a loss of $4.8 billion in just one month. Products from leading institutions like BlackRock are experiencing daily outflows, and even the premiums that were previously sought after have turned negative, indicating that both large institutions and retail investors are selling rather than buying.
3. The technical indicators are flashing red, scaring off investors.
People who understand the market are all focusing on the "death cross" signal — this occurs when the short-term price average line falls below the long-term average line, which is usually seen as a signal that the market is about to fall. This time, Bitcoin just happened to encounter 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 hesitate to enter the market. With more people selling, the price naturally cannot hold up.
4. The hacker attack became the "last straw".
Just when the market was already in a panic, the decentralized exchange protocol Balancer was suddenly attacked by hackers, resulting in a total loss of 120 million USD. Although the official statement said they would compensate, this hit everyone’s pain point – people were already worried about the technical security of cryptocurrencies, and when an incident actually occurred, they were even more afraid to hold onto them and quickly sold off to avoid risk.
This incident also triggered a chain reaction, causing crypto-related stocks to fall, and the confidence in the entire sector was impacted. In addition, over 310,000 people were liquidated within 24 hours, leading to a loss of 1.2 billion USD, and the panic sentiment spread wider, forcing more people to sell, creating a vicious cycle. #Gate新一期储备金报告出炉