The crash in the crypto market worsened today as Bitcoin (BTC) fell to a 10-month low of $74,550, testing a vital technical support zone analysts have been flagging for weeks. Other cryptocurrencies dropped in tandem and are experiencing significant losses. Ethereum (ETH), XRP, and Dogecoin (DOGE) are losing value as the market becomes more risk averse and institutional liquidations increase.
The degree of the current selloff can be found in the market sentiment indicators. The Crypto Fear & Greed Index has fallen to 14, which denotes “extreme fear” and the total market cap of cryptocurrencies has fallen almost 5% to $2.53 trillion. Over the span of a few days, ETF outflows, low stablecoin liquidity, and unwinding of leveraged positions have collectively decreased the market cap by over $510 billion.
The decline of Bitcoin is being attributed to the combination of a few macro and geopolitical factors. Investor anxiety over the potential of a partial US government shutdown has reached an all time high.
Additionally, the ever-constant strain between Iran and the US, coupled with tariff issues is creating a risk-off environment. This concern is furthered by the US stock market futures, which have worsened. The Nasdaq 100 is expected to open almost 1.8% lower, strengthening the correlation between crypto and traditional risk assets.
Ethereum’s value dipped by more than 8% and went below $2,200, while XRP declined by more than 5% and is now approximately $1.53. DOGE dropped by almost 16% during the week, demonstrating the extent to which volatility affects high-beta assets.
The digital asset selloff negative spillover effect extended to gold and silver, which dropped by almost 8% and 12% respectively, suggesting that the selloff was driven by widespread financial and commodity market selloff.
More declines seem likely, according to technical analysts. Veteran trader Peter Brandt observed that the support level of $74,500 is likely to lead to a downward move of the price to $66,530, losing his $58,000 bullish target for Bitcoin to $54,000. Rekt Capital noted that BTC’s monthly close below a macro triangle base is a signal of bearish acceleration, and $82,500 is now the price to beat on the upside as the new resistance.
The severity of the declines is reflected in the derivatives data. In the last 24 hours, CoinGlass has recorded over 201,000 trader liquidations, which is approximately $800 million in liquidations. $600 million of these liquidations were in long positions, while $200 million were in short positions. On Hyperliquid, someone liquidated a $15.46 million BTC-USD order, which is the largest single liquidation.
There has also been notable on-chain developements including increased movements from both whales and institutions. Trend Research added 20,000 ETH on Binance, upping their total to 53,588 ETH to settle Aave loans. Another prominent whale supposedly sold 121,000 ETH valued at around $292 million to deleverage, despite some dip-buying activities occurring with the sell.
With continued outflows from ETFs, increased liquidity, and bearish techincal formations, analysts express caution around further downside risk for BTC, ETH, XRP, and DOGE in the short-term.
