Why did the crypto market fall? $40 billion evaporated in a single day, and Bitcoin lost the $108,000 mark.

Affected by macroeconomic uncertainty and increased selling pressure, the cryptocurrency market once again faced pressure on October 21, with a single-day market capitalization evaporating by over $40 billion. Market sentiment plummeted, with the Crypto Fear and Greed Index dropping sharply from last week's 42 to 33, clearly falling back into the “fear” zone. Bitcoin (BTC) price fell by 3.17% to $107,659, while mainstream alts such as Ethereum (ETH), Solana (SOL), and BNB saw declines of around 5%, indicating that traders are actively withdrawing from risk positions.

Market Decline: Bitcoin Struggles, Altcoins Fall Even More

Bitcoin Faces Strong Rejection: The price of Bitcoin has fallen by 3.17% in the past 24 hours, currently trading at $107,659. Although Bitcoin briefly tested the $110,000 level, it faced strong selling pressure, pulling the price back to the key support level around $107,500. If this support level fails, Bitcoin may test $105,000 again, an area that has acted as strong support during recent market fluctuations.

Mainstream alts deep correction: Leading alts have also not been spared, generally experiencing significant fall:

· Ethereum fell 5.28% to $3,860, failing to maintain above $4,000.

· Solana fell 5.05% to 183.42 USD.

· BNB fell 5.84% to 1,068.90 USD.

Smaller market capitalization altcoins and Meme coins have been more severely impacted, with some projects recording double-digit falls due to traders concentrating on exiting risk positions.

Market Capitalization and Sentiment Indicators: The total market capitalization of the entire crypto market is currently $3.74 trillion, a decrease of 2% compared to the previous day. Trading volume remains stable at $437 billion. Most notably, market sentiment has sharply shifted from recent optimism, with the Crypto Fear and Greed Index dropping from 42 to 33, clearly returning to the “Fear” zone, indicating that investors are uneasy about macroeconomic conditions and market uncertainty.

Macroeconomic Uncertainty: Government Shutdown Freezes Regulatory Catalysts

The Drag of the U.S. Government Shutdown: Part of the market's indecision is related to the ongoing U.S. government shutdown, which has entered its third week. This shutdown, which began on October 1, has left key regulatory agencies like the U.S. Securities and Exchange Commission (SEC) operating with minimal staff, freezing several important regulatory functions.

ETF Approval Process Stalled: A standstill has led to over 90 pending ETF applications being shelved, involving various crypto assets such as Solana, Litecoin, and XRP. The approval of these ETFs is seen as a key catalyst for releasing substantial institutional capital and was expected to be a strong driver for price increases. The interruption of regulatory activities has left the market lacking recent positive narratives to hedge against macroeconomic uncertainties.

Expected Recovery Opportunity: White House economic advisor Kevin Hassett recently stated that an agreement is expected to be reached this week to end the shutdown. According to Polymarkets' prediction data, the probability of the government shutdown ending between October 23 and 26 is 44%. If the shutdown ends as scheduled, regulatory activities for Crypto Assets are expected to quickly resume, pending ETF decisions will be advanced, which could serve as a strong catalyst to help stabilize and drive up Crypto Assets prices for recovery in the fourth quarter of 2025.

Conclusion

The sell-off in the crypto market on October 21st was a result of cautious macroeconomic sentiment and concentrated profit-taking, accompanied by the evaporation of over $40 billion in value. Bitcoin failed to hold above $110,000 and fell back, exacerbating investor panic. Whether the market can stop the decline and stabilize will highly depend on whether the U.S. government shutdown can be resolved quickly. Eliminating regulatory uncertainty, especially the resumption of the ETF approval process, will be key to attracting institutional capital and reversing the current “fear” sentiment.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions cautiously.