Why is Crypto Market Down Today? Market Cap Sinks as Traders Flee Risk Assets

Bitcoin and other major cryptocurrencies like Ether, XRP, Solana, Dogecoin, and Cardano dropped more than 3% early Wednesday as traders took profits after a strong rally on Tuesday. According to data from CoinGecko, the total crypto market cap fell over 4% in the past 24 hours to $2.73 trillion.

But there’s more behind the dip than just profit-taking. From global market jitters and regulatory uncertainty to big moves by Bitcoin whales and fresh pressure on AI tokens, the crypto space is facing a storm of mixed signals.

Here’s a closer look at what’s really driving the market—and what might come next.

Investors Still Cautious

Bitcoin slipped to $83,600 from $84,200. Ether and Cardano fell by up to 5%, while XRP continued its downward trend and could see more losses. However, there was some positive news for XRP holders: ProShares filed for an XRP ETF, aiming for a launch on April 30. BNB also declined about 2%, currently trading at $578.

The latest price moves show that investors are still cautious, avoiding risky assets due to global economic challenges and possible changes in crypto regulations.

Big Bitcoin Sellers Slow Down

According to CryptoQuant, large Bitcoin holders have cut back on selling. Daily sales dropped from 800,000 BTC in late February to about 300,000 BTC now. Many of these investors have already sold their coins at a loss.

Analyst Ali Martinez noted that whales have taken profits during the recent rally, selling more than 29,000 BTC since April 9. In a recent post on X, he also mentioned that if Bitcoin climbs back to $86,900, over $600 million in short positions could be liquidated.

Whales Step Back as Market Weakens

There’s been a drop in Bitcoin accumulation, with large holders reducing their positions by around 30,000 BTC in the past week. At the same time, global markets have shown weakness—Hong Kong’s stock market fell 2.9% despite strong economic growth in China. Continued trade tensions are making investors more risk-averse, affecting crypto markets too.

Surprisingly, Stablecoins Stay Steady

Stablecoins like Tether (USDT) and USD Coin (USDC) have stayed strong during the market turbulence. Tether is trading at $0.9999 with a market cap of $144.56 billion, while USDC is holding steady at $1. These stablecoins are becoming more important as reliable options during unstable times.

Nvidia Stock Drop Hits Crypto and AI Tokens

The market took a hit Tuesday evening after Nvidia’s stock dropped 8% to $89.10. The fall came after the company announced a $5.5 billion charge due to the U.S. government banning its H20 chip sales to China. As a result, Bitcoin dropped to $83,600, and XRP and Cardano followed with 2% and 4% losses, respectively. AI-related crypto tokens also suffered.

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Powell’s Speech Could Change the Game

Federal Reserve Chairman Jerome Powell is set to speak today, and markets are watching closely for hints of a possible interest rate cut. Ongoing tariff issues and rising recession concerns have increased pressure on the Fed.

Some research suggests that the trade war and Trump-era tariffs could help bring inflation down, which might give the Fed room to cut rates sooner than expected.

Concerns about a recession are growing. While some believe the risks are already priced in, others warn that more pain could be ahead. Bitcoin’s appeal as a decentralized asset is gaining attention again as traditional markets show instability. Trump’s supportive stance on Bitcoin could help, but risks remain high.

Recovery Might Be in Sight

A recent report from Coinbase shows that the crypto market—excluding Bitcoin—has dropped 41% from its December highs. Venture capital investment is also down by 50–60% compared to the peak years of 2021–2022.

Still, Coinbase predicts that the market will hit a bottom by mid-to-late Q2 2025 and start recovering in Q3. They advise investors to stay cautious and flexible, as liquidity is weakening and risk appetite is fading.

The road ahead for crypto looks rocky, but history shows the quiet phases often set the stage for the next big move.

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