As of March 26, 2026, the sudden crash in virtual currencies (cryptocurrencies) was primarily caused by a combination of four major negative factors: macro tightening, geopolitical risk aversion, high leverage liquidations, and regulatory negative news, resulting in a "stampede-like decline."

1. The Fed's hawkish stance and rate cut expectations were completely dashed (the most critical factor)

- Inflation data repeatedly fluctuated, shifting market expectations from "multiple rate cuts in the first half of the year" to "significant delay in rate cuts, or even potential rate hikes."
- The US dollar and US Treasury yields surged, liquidity for high-risk assets (cryptocurrencies) was drained.
- Funds withdrew massively from crypto ETFs and other channels (over $1.8 billion in recent days).

2. Escalation of Middle East geopolitical conflicts (direct trigger)

- US-Iran standoff, Strait of Hormuz risks, global risk-off mode.
- Bitcoin did not show safe-haven properties; instead, it was sold off as a "high-risk asset."
- Oil prices soared → companies/funds lacked cash → selling cryptocurrencies to raise liquidity.

3. High leverage "death spiral" (amplifier of the crash)

- The market previously had extremely high leverage and crowded longs.
- Price drops → forced liquidations (margin calls) → concentrated sell orders → further declines → more liquidations.
- Within 24 hours: 200,000 liquidations, $555 million in total liquidated, with over 80% of positions being long.

4. Regulatory and industry negative news (emotional kill)

- The new version of the US "Clear Act": proposed restrictions on stablecoin yields, undermining market confidence.
- DeFi protocols were attacked, losses exceeding hundreds of millions, industry risk appetite cooled.

5. Technical breakdown (triggering algorithmic stop-loss)

- Bitcoin broke below key support levels at 70,000, 69,000, and 68,000.
- Large volumes of quant and stop-loss orders triggered, accelerating the decline.