
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.
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
This appears to be a short-term correction, not a trend reversal, driven by profit-taking and leverage cleanup.
If $3.73T holds as support and macro data leans dovish, a bounce could occur within days to a week.