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  • Shrishesh Tanksalkar
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    Shrishesh is a versatile writer with 2+ years of experience in cryptocurrencies. An engineer turned storyteller, this selective introvert is a wannabe biker on weekends.

    • 2 minutes read

    When Will the Crypto Market See a Reversal?

    Story Highlights
    • The crypto market cap falls 3.32% overnight, finds grip at $3.76 trillion.

    • Fear & Greed Index settles at 57, while leverage shakeout leads to a 112% surge in liquidations

    • Exchange outflows signal accumulation potential amid broader market uncertainty

    The crypto market today has entered retracement mode. This has come after the valuation of the business dropped by 3.32% to $3.76 trillion. However, the daily trading volume has surged by 3.07% to $180.36 billion. This move hints at growing activity during a short-term correction. That being said, as Bitcoin dominance climbs to 61.1%, capital appears to be rotating out of riskier altcoins.

    Amidst this downturn, the Fear & Greed Index meter has bogged down to a neutral score of 57, a sign that investor sentiment hasn’t fully flipped bearish. So, let us check what led to the trek down to the south? And how soon can we expect a rebound?

    Why the Market Fell: Key Drivers Behind the Decline

    The following are the key factors why the crypto market is down today.

    1. Whale & Miner Profit-Booking

    According to CryptoQuant, Bitcoin miners offloaded ~15,000 BTC worth about $1.8B after the July rally. This is while whales executed their third profit-taking cycle since mid-2024. Additionally, options markets predicted further downside, with traders buying puts anticipating a 10–30% decline.

    2. Leverage Liquidation Cascade

    The selloff was worsened by a 112% spike in BTC liquidations, totaling $151M , with $143M from long positions. Notably, open interest rose 9.5% even as funding rates plunged 49%, revealing how stretched leverage had become. This caused a cascade of forced selling, dragging the market lower and bringing sentiment down from yesterday’s “Greed” to today’s “Neutral.”

    3. Technical Breakdown

    The market cap broke below its 7-day SMA at $3.85T and is now testing the 23.6% Fibonacci retracement at $3.82T. With RSI at 42.07, there’s still decent room for a dip before hitting oversold territory. The key level to watch is $3.73T, a break below could invite deeper correction to $3.57T.

    Signs of a Bottom?

    The Exchange Flow Balance chart, which I’ve shared from Santiment, offers an important clue. Over the past few days:

    • BTC shows a streak of net outflows, suggesting whales and long-term holders are removing assets from exchanges.
    • ETH’s netflow appears neutral-to-slightly-positive, indicating mixed sentiment.
    BTC ETH onchain

    This mismatch between price decline and exchange behavior implies that while prices are falling, investors aren’t panic-selling, they may be preparing for a re-entry.

    What to Watch Next?

    Tonight’s U.S. jobs report could swing short-term sentiment considerably. Weak employment numbers may push rate cut expectations, boosting crypto alongside equities. With SPY-crypto correlation at +0.90, traditional markets will likely dictate the immediate bounce or bleed.

    FAQs

    Is this a crypto market crash or a short-term dip?

    This appears to be a short-term correction, not a trend reversal, driven by profit-taking and leverage cleanup.

    When will the crypto market rebound?

    If $3.73T holds as support and macro data leans dovish, a bounce could occur within days to a week.

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