Key Takeaways

• Bitcoin has fallen ~11% since Tuesday, putting it on pace for its worst two-day stretch since the second week of May.
  
• Part of the reason for the sell-off is technical in nature; its price broke below key support, confirming a head and shoulders pattern, which accelerated the decline.
  
• Short-term pain in the crypto market comes amid the worst daily decline for the S&P 500 since early June and the largest one-day jump for the VIX Index in almost three months.

This week’s crypto sell-off appears to be driven by a culmination of factors. The latest DeFi craze was arguably overdue for a pullback, but bitcoin’s slide indicates there may be more to this than just pure profit taking.

Part of this pullback is technical in nature, but it also comes amid a broader sell-off in traditional markets as well. Bitcoin has fallen ~11% since Tuesday, putting it on pace for its worst two-day stretch since the second week of May.

BTCUSD vs. Rolling 2-Day % Change