The ongoing selloff in the crypto market, driven by economic uncertainty and technical weakness, threatens significant liquidations for Bitcoin, Ethereum, and XRP.

Crypto Market Loses $100 Billion

The slow escalation of the crypto market selloff was driven by investor panic prompted by developments in the global economy, macroeconomic events, and technical weakness. In the past day, the value of all cryptocurrencies fell below $2.05 trillion, a loss of nearly $100 billion, Coingape reports.

At their intraday lows of $58,207 and $2,513, respectively, the prices of Bitcoin and Ethereum fell by over 4%. Within the past day, the value of several prominent altcoins like ADA, BNB, SOL, XRP, and TON dropped by 4-7%. Both AI coins and meme coins experienced significant price drops.

The following are some of the reasons why the cryptocurrency market is likely to stay volatile and see further selling in the days ahead.

Bank of Japan’s Policies Add to Market Instability

Despite the Bank of Japan's (BOJ) announcement that interest rates will not be raised this year in response to the current market uncertainty, yen carry trades continue to cast a shadow over the markets.

After the debut of the Bitcoin ETF, many investors have shifted their focus to cash and carry trading, leading experts and traders to predict a further wave of selling in the cryptocurrency market.

"They won’t be able to hike again, at least for the rest of the year," recently stated Makoto Sakurai, a former board member of the BOJ. The question of whether the Bank of Japan can raise interest rates again in March remains unanswered.

Hideki Ito, commissioner of Japan's financial services agency, was also reluctant about authorizing crypto ETFs, citing concerns about investor protection and the lack of evidence of long-term value. This action was taken in response to the recent market collapse following Japan's rate hike.

Geopolitical Tensions Contribute to Market Selloff

Recent worries about a fire at Europe's biggest nuclear power plant have contributed to the ongoing crypto market selloff amidst the Russia-Ukraine crisis. At the Ukrainian nuclear power facility Zaporizhzhia, which is under Russian occupation, both countries have staked accusations that the other started the fire.

Israel reportedly braces for a catastrophic Iranian onslaught within days, according to multiple reports. It may take place before Thursday's scheduled talks on a new ceasefire and hostage deal, according to The Times of Israel.

Hindenburg Research Accuses SEBI Chairperson

Meanwhile, concerns were aroused when Hindenburg Research directly accused the SEBI Chairperson of having a stake in mysterious offshore organizations connected to the Adani money-siphoning affair.

The chief executive officer of SEBI, Madhabi Puri Buch, refuted the claims. However, according to a recent post by Hindenburg Research on the X platform, Buch's latest remarks call into question the legitimacy of her consulting firms and her involvement.

Recession Fears Linger Despite Economic Optimism

US CEOs and businesses feel the economy is strong and shows no indications of recession, but other economists say the economy could be in recession. Thus, recession fears persist. For more information on the state of the labor market, the cryptocurrency market is also watching this week's jobs report.

Important US macroeconomic data are due this week. Inflation data for the US Consumer Price Index (CPI) and Producer Price Index (PPI) will be on Wednesday, and figures for Initial Jobless Claims and U.S. Retail Sales will be on Thursday.

Prior to making any decisions about its monetary policy, the US Federal Reserve should take these into account. Put a halt to the crypto market selloff with lower inflation figures.