The cryptocurrency landscape experienced a dramatic shift on Friday, with the market taking a notable plunge, losing approximately 6.7% in value. This staggering drop equates to over $160 billion wiped off the total market capitalization, which now stands at around $3.84 trillion, as reported by CoinGecko. After a series of four consecutive weeks displaying positive gains, the recent downturn raises questions about whether the bullish momentum that once propelled digital assets to near-record heights is starting to slow down.
Leading the charge in this downturn is Bitcoin, which had recently soared above $120,000 but has retreated to around $115,300—a decline of 2.6% within the last 24 hours. Ethereum is also feeling the pressure, sliding down by 1.3% to $3,596, while XRP faces an even steeper drop of 3.6%, currently trading at $3.07. This market-wide correction seems to have been driven primarily by forced liquidations and a shifting sentiment among investors.
One of the catalysts for this rapid decline is the massive sell-off orchestrated by Galaxy Digital, which has reportedly offloaded 10,000 BTC, valued at around $1.18 billion. This move exerted significant pressure on the crypto market. Additionally, the firm withdrew $370 million in USDT from major exchanges such as OKX, Binance, and Bybit, indicating a broader strategy of disposing of assets. It appears that Galaxy Digital isn’t done yet, as shortly after the initial sell-off, they transferred another 2,850 BTC (approximately $330.44 million) to various centralized exchanges, hinting at potential further turbulence ahead for traders.
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— Lookonchain (@lookonchain) July 25, 2025
The repercussions of this massive sell-off are being felt throughout the market, particularly among leveraged positions. Recent data from CoinGlass reveals that over $721 million in leveraged assets were liquidated within a single day, with Ethereum leading the charge at $163.9 million in liquidations, followed closely by Bitcoin at $155.5 million and XRP nearly hitting $49 million. This spike in liquidations serves as a stark reminder of the vulnerabilities faced by traders heavily reliant on borrowed funds, especially during swift price movements that can catch them off guard.
As liquidation pressure continues to mount, a staggering $273 million worth of long positions were liquidated in just the last 12 hours alone, with the largest single liquidation order hitting an impressive $17.35 million on the OKX BTC-USDT-SWAP market. This sudden correction may be viewed as a natural retracement following a prolonged rally. The crypto market capitalization had recently approached the $4 trillion mark, with altcoins experiencing significant gains during this bullish phase. However, the Altcoin Season Index has now dipped to 40, signaling a troubling trend for smaller-cap tokens in relation to Bitcoin’s performance.
Institutional movements are also playing a critical role in influencing market volatility. While ETF flows for Bitcoin indicate long-term bullish sentiment, shifting strategies from institutional giants like BlackRock and Fidelity are believed to be temporarily disrupting prices. Coupled with global macroeconomic uncertainties and profit-taking by large investors, these factors are creating pressures on short-term performance.
Despite this recent downturn, retail sentiment remains surprisingly resilient. The Crypto Fear & Greed Index still indicates a feeling of “Greed” among traders, suggesting that many view this pullback as a prime buying opportunity rather than a signal of bearish news ahead. Yet, analysts urge caution; they warn that overly optimistic sentiment in the face of evident technical weaknesses could precipitate further downward movement.
From a technical analysis perspective, Bitcoin’s recent dip below critical support levels has traders keeping a close eye on the $116,000 range for signs of potential stabilization. Ethereum faces its challenges as well, grappling with an uptick in its validator queue—an indication that network activity might be waning. Meanwhile, XRP has broken through its recent support level, with analysts speculating it could test around the $2.72 mark should selling pressure persist.
However, not all digital assets are suffering during this turbulent period. Some tokens have recorded notable gains, such as Vine (up 44.7%), The Innovation Game, and Pepecoin, which have risen by 46% and 35%, respectively. This suggests that, amid broader market weakness, niche tokens are still attracting interest.
In conclusion, while some investors view this recent dip as a healthy correction in an otherwise booming market, others are more cautious. With nearly 208,000 traders liquidated in a single day and intensified volatility across major currencies, the path forward remains uncertain. As the cryptocurrency market adapts to these fluctuations, it will be fascinating to see how both long-term investors and day traders respond in the days and weeks to come.
Are you keeping an eye on the market, or are you waiting for a clearer signal before making your next move? The current state of the crypto world certainly presents challenges, but for the savvy investor, opportunities still abound.