At least one part of the problem is this:

BTC price (above) and Bitcoin Shorts on Bitfinex (below). The number you see down right is the number of BTC.

What am I looking at?

It's the BTC price chart above BTC Shorts on an exchange called Bitfinex. People bet on falling prices and this is moving prices on its own - sounds crazy, but this is what happens.

When you open a leveraged short position, you borrow Bitcoin from the Exchange (a little simplified). Right after borrowing you are selling these BTC for USDT. Price is dumping, if you're lucky - or if you have opened such big short positions, that this alone will dump the price (as it happend today). After other people jump off the boat, price will dump even more. To close the short position, you will have to buy BTC back so you can give back the BTC you got from the exchange. You will have to pay a lot less for these BTC, since the price is so low. The difference will mostly be your profit!

In this case, on Bitfinex alone, over 1000 BTC have been put in short positions. To avoid arbitrage trades, this probably has happened on other exchanges, too.

Is this the only cause?

No. Overall market situation doesn't really look funky right now. But leverage trading is accelerating other moves. We had this in 2021, too - but almost nobody on this sub could complain: millions of dollars in short positions have been liquidated (it's called a short squeeze) because of a pump in July. Since people have to buy back BTC to close short positions, price pumped even more.

What will happen now?

If you look at long positions, it doesn't look good. The opposite of short is long, and these might get liquidated if prices drop further, leading to a long squeeze and even more dropping in price.

But as always - most of the time we don't know shit about fuck and always DYOR.