Crypto Market Dump:

Source
Here is why....

TL;DR
The People's Bank of China restricts banks and payment institutions from enabling crypto related transactions, people panic-sell, and market dumps. Rinse and repeat...😁

If you've followed crypto trends for some time now, you probably have come across the term China FUD (FUD = Fear Uncertainty and Doubt).

The China FUD describes activities(majorly government-led activities) in China that rain some impact on the Crypto market. People's reactions to their perceived impact of these activities are what have been summarized into the acronym (FUD) - the either react with Fear, Uncertainty, or Doubt.

China has a centrally-planned economy, and anything outside their control is immediately an object of hatred for the State. Bitcoin has been one major enemy to the Chinese government.

From history, China has made numerous attempts to clamp down Bitcoin operations in its territory. Due to the censor-proof quality of the asset, clamping down on it has been a clear case of running in circles for China.

The most they've done was to stop Bitcoin from riding on their financial structures, which is no treat to the asset. However, the Chinese people are still very much into this forbidden fruit called Bitcoin. This explains the reason behind the recent dump.

The People's Bank of China (their own CBN) placed a caveat on banks and payment institutions, restricting them from providing crypto related services. Consequently, people went on a panic-sell spree. You can recall what happened when Nigeria did same (though you can't compare the market impact), people feared their monies will be gone and sold off.

Recall that some positive news had hit the market sometime last week (El Salvador, Texas, etc). Some traders had already made projections based on those positive news, thinking the market was bound to go upward again after doing some weeks of bloodbath. They had taken leveraged long positions in the Futures market, huge gambles in loose terms.

Sadly, China struck with their FUD and price made a sharp U-turn. The immediate sell-off only paved the way for something bigger. When prices fall as a result of increased sell pressure, and trades in the Futures market start getting liquidated (running into huge losses), then the crypto bloodbath gets intensified and loses accumulate.

As more accounts gets liquidated and loses accumulate, even more persons begin to panic sell to save their monies from being wiped out totally. Also, harsh rates usually fall in periods downward price movement, as miners no longer feel properly compensated for their work.

Though it is certain that the market will recover, "when" cannot be said for sure. Meanwhile, Micheal Saylor and Institutional Investors like Microstrategy are buying up more bitcoins in the recent dip. You can pick a cue from them.

It is also a very funny fact that Chinese FUDs still gain so much attention after all these while of repeatedly showing up. China is always against BTC, and because it is against BTC, every other coin gets affected when they strike. But...why pay attention to their hate? ...to the extent of letting it run the market down?

This further emphasizes the point that the crypto space needs more knowledgeable believers than some bag-chasing bandwagon. Until this is achieved, these reckless volatilities from negligible news won't stop.