The recent big dump of Ethereum cannot be explained by any single event. It feels more like multiple pieces of Unfavourable Information getting dumped at the same time, creating a "perfect storm" in the market.

I have sorted out a few core factors and ranked them by lethality:

**The pressure cooker effect at the macro level (this is the root cause)**

All risk assets are under the threat of this knife.

What about the Federal Reserve's interest rate cut expectations? Basically gone cold. At the beginning of the year, everyone was looking forward to 3 to 6 rate cuts this year, but what happened? The latest inflation data—CPI and PCE—has been continuously soaring, stubbornly high. Federal Reserve officials are now all making tough statements: "Don't rush, we are not considering rate cuts for now." What is the current consensus in the market? If we can get one rate cut this year, that would be great; otherwise, we might not get any at all.

What does this mean?

The cost of capital remains high. With risk-free assets like U.S. Treasury bonds yielding over 5%, who would still be willing to take risks playing with high volatility cryptocurrencies? Naturally, money flows out of the crypto space into more stable safe havens.

Liquidity tightening. The cost of borrowing becomes expensive, and there is less money in the market. The crypto market originally relies on liquidity to build its bubble, and once the water is drawn, its true form is immediately revealed.

The US dollar index is strengthening. High interest rates support the rise of the dollar, and the dollar usually has an inverse relationship with assets like Bitcoin and Ethereum—when the dollar rises, the coin prices have to kneel.

**Geopolitical suddenly explodes (directly triggered)**

The conflict between Iran and Israel escalates.