Crypto Market Cap Drops Over 6% as Bitcoin, ETH and XRP Enter Red — What’s Going On?

The global crypto market took a sharp turn Friday, shedding about 6.7% in value and knocking over $160b off its total market cap, now hovering around $3.84 trillion, according to data from CoinGecko.

The drop comes after four consecutive green weekly candles, suggesting the bullish momentum that carried digital assets to near-record highs is beginning to stall.

Bitcoin, which had recently surged above $120,000, pulled back to around $115,300, registering a 2.6% drop over the past 24 hours. Ethereum fell 1.3% to $3,596, while XRP posted a steeper 3.6% daily loss, now trading at $3.07.

The declines follow a broad market correction, driven by leveraged liquidations and shifting investor sentiment.

Further, Lookonchain said that Galaxy Digital offloaded 10,000 BTC, worth about $1.18b, putting serious pressure on the crypto market. It also pulled $370m in USDT from exchanges like OKX, Binance and Bybit, hinting at more sell-off plans.

Bitcoin sell-off still underway!#GalaxyDigital deposited another 2,850 $BTC($330.44M) to exchanges 11 minutes ago.https://t.co/lD8tgkC4Pyhttps://t.co/T3wOpRSbnw pic.twitter.com/eJ4pEvDvOQ

Right after, Galaxy Digital moved another 2,850 BTC, valued at roughly $330.44m, to centralized exchanges. This suggests the firm is not done selling, and traders are bracing for more market swings soon.

Over $721m in leveraged positions were wiped out in the last 24 hours alone, according to liquidation tracker CoinGlass. Ethereum led the bloodbath with $163.9m in liquidations, followed closely by Bitcoin at $155.5m and XRP at nearly $49m.

The spike in liquidations shows the vulnerability of traders heavily exposed to borrowed funds amid sudden price drops.

Liquidation pressure mounted throughout the day, with nearly $273m worth of long positions cleared in the last 12 hours alone. The largest single liquidation order occurred on OKX’s BTC-USDT-SWAP market, valued at $17.35m.

The sudden downturn marks a natural retracement after an extended rally. The crypto market cap had recently tested the $4 trillion mark, while altcoins enjoyed outsized gains during the surge. However, the Altcoin Season Index has since dropped to 40, suggesting a weakening trend for smaller-cap tokens relative to Bitcoin.

Institutional activity remains a key factor in the current volatility. While ETF flows for Bitcoin continue to reflect long-term bullish interest, rotation strategies from firms such as BlackRock and Fidelity are believed to be causing temporary price dislocations.

These moves, paired with macroeconomic uncertainty and profit-taking from whales, have weighed on short-term performance.

Despite the downturn, retail sentiment remains surprisingly strong. The Crypto Fear & Greed Index continues to show “Greed,” hinting that many traders still view the correction as a buying opportunity rather than a bearish reversal.

However, analysts caution that overly optimistic sentiment in the face of technical weakness can lead to further downside.

From a technical standpoint, Bitcoin has dipped below key support levels, with traders eyeing the $116,000 zone for signs of stabilization.

Ethereum is also under pressure following a recent spike in its validator queue, a sign that network activity may be cooling. XRP, meanwhile, has broken below its near-term support, with potential to test the $2.72 mark if selling continues.

Not all assets suffered losses. CoinGecko’s top gainers list included Vine, The Innovation Game and Pepecoin, up 44.7%, 46%, and 35% respectively, suggesting selective interest in niche tokens amid broader weakness.

While some investors see the dip as a healthy correction, others remain cautious.

With nearly 208,000 traders liquidated in a single day and rising volatility across major tokens, the road ahead looks choppy, even as long-term conviction holds strong.

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