Key reasons

Liquidation of leveraged long positions Many traders had “long” bets (i.e. expecting prices to go up) using leverage. When prices drop a little, stops are triggered, forcing liquidation of those positions. That causes cascading sell-pressure.

Loss of critical support levels in prices For example, Bitcoin fell below a support around US$115,000, which tends to prompt more selling if people believe prices will go lower.

Weakening sentiment / “risk-off” mood Investors are more risk-averse: when uncertainty or fear increases (about macroeconomics, regulation, interest rates, etc.), they move out of risky assets like crypto.

Interest rate / monetary policy expectations Expectations that central banks (particularly the U.S. Federal Reserve) may stay restrictive or not cut rates as soon as hoped can reduce enthusiasm for speculative assets, because higher rates tend to make safe yields more attractive relative to crypto/risk.

Regulatory and policy uncertainty Unclear or negative regulatory signals, or delays in favorable policies, can spook investors. When regulation looms, people tend to reduce exposure just in case.

Profit‐taking after gains Crypto has had strong runups. Some investors take profits, especially after big increases. When many do that at once, those sales can trigger further downside.