Crypto market crash (using February 2026 as an example) is the result of a combination of macro tightening, capital withdrawal, leverage liquidations, regulatory negative news, and fragile market structure. It is not caused by a single factor.

1. Macro Liquidity Tightening (Main Trigger)
- Hawkish Federal Reserve expectations: Market anticipates Warsh as Fed Chair, favoring high interest rates and balance sheet reduction, with funds flowing from high-risk assets (cryptocurrency) into US Treasuries and USD.
- Rising interest rates: Risk-free returns increase, making crypto less attractive, and institutions accelerate withdrawals.
- Correlation with US stocks: Crypto is viewed as a "high beta tech asset," so the decline of the Nasdaq triggers a simultaneous crash in crypto prices.

2. Capital Reversal (Core Selling Pressure)
- Continuous outflow from spot ETFs: US Bitcoin ETFs have experienced net outflows for several months, with weekly outflows exceeding $1 billion, turning institutions from buyers into sellers.
- Retail investor exit: Adoption rates decline, spot trading volume shrinks, and buying interest dries up.
- Stablecoin contraction: USDT market cap turns negative, leading to liquidity shortages.

3. High Leverage Liquidations (Crash Accelerator)
- High leverage in derivatives markets (commonly 5–100x), where a price drop triggers forced liquidations.
- A death spiral of falling prices → liquidations → passive selling → further declines.
- In early February 2026, billions of dollars in liquidations occurred in a single day, with over 90% of positions being longs.

4. Regulatory and Policy Negative News (Confidence Collapse)
- US CLARITY Act faced setbacks; Coinbase withdrew support, regulatory stance wavers.
- Hong Kong raised crypto risk weights to 1250%, significantly increasing bank participation thresholds.
- Trump’s Bitcoin strategic reserve expectations failed to materialize.

5. Market Structure and Black Swans (Amplifying Declines)
- Institutional pricing power dominates; model-driven risk controls trigger concentrated sell-offs.
- Miners and whales sell off en masse, causing supply to surge.
- DeFi security incidents and hacker attacks further undermine confidence.

Summary in one sentence: Liquidity withdrawal + capital exit + leverage liquidations + regulatory negativity + fragile structure all combined to cause a sharp crash.

Would you like me to condense these reasons into the 3 most critical points to help you quickly understand the upcoming trend?