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Crypto Market Dips Ahead of Monthly Close – What’s Fueling the Drop and What Comes Next?

Published by
Sahana Vibhute

The crypto market is witnessing a sharp pullback today, leaving traders and investors questioning whether this is a healthy correction or the beginning of a broader downturn. With Bitcoin (BTC) price dropping below $116,000 and Ethereum (ETH) price consolidating near $3,600, the entire market cap has contracted by nearly 4% in 24 hours. However, this is not just about prices—underlying forces like regulatory uncertainty, leverage flush-outs, and altcoin volatility are at play. 

Altcoin Sell-off Deepens: Pressure on Broader Market

The sharpest losses today are centered around the altcoins, as the ones in the top 10 have attracted significant loss. According to the market data, 48 of the top 100 altcoins are in red by more than 10%. XRP price also plunged by over 12% in the past couple of days, triggering over $112 million in liquidations from long positions. These abrupt liquidations sparked a cascade of forced selling, amplifying volatility across exchanges. 

On the other hand, the Bitcoin price dropped heavily from the daily highs over $118,400 to as low as $115,100 hinting towards a massive drop in the strength of the bulls. However, they managed to reclaim the local support at $115,260 and helped the price to rise above $115,700 at the press time. Regardless of this, the bearish cloud is believed to hold hover over the BTC price rally and eventually the entire market for a while. 

What Fueled the Bearish Pullback?

While macro conditions have improved globally, regulatory ambiguity in the U.S. is casting a long shadow over crypto sentiment. The U.S. Senate is currently evaluating bills like the Genius Act and broader crypto market structure frameworks. Although lawmakers have shown increasing openness toward Bitcoin and Ethereum, there’s still a lack of clarity on how altcoins and stablecoins will be treated.

This fog has hit investor confidence, particularly among institutions and hedge funds seeking to diversify beyond BTC and ETH. The delay in approvals for altcoin ETFs—particularly Solana, XRP, and Polygon—has led to cautious repositioning.

Until the U.S. finalizes its stance on non-BTC crypto assets, speculative appetite in altcoins will remain under pressure.

What’s Next? Will the Markets Close the Monthly Trade on a Bearish Note?

As July draws to a close, the crypto market is showing signs of weakness that may lead to a bearish monthly close. Bitcoin continues to trade below its critical 50-day EMA, with lower highs forming on the daily chart—an early signal of trend exhaustion. Ethereum is also struggling to maintain a bullish structure, with volume declining and momentum indicators like MACD and RSI pointing toward further downside. Altcoins remain heavily oversold, with most failing to reclaim key support zones after recent breakdowns. 

If Bitcoin closes the month below $118K, it could confirm a short-term bearish trend, potentially triggering a slide toward $112K or even $110K in early August. However, a strong recovery and close above $120K would invalidate this setup and potentially fuel a renewed rally. Until clear confirmation emerges, traders should expect choppy price action with downside risk dominating sentiment into the new month. Strategic levels will be critical for trend validation.

Sahana Vibhute

A passionate cryptocurrency and blockchain author qualified to cover every event in the crypto space. Researching minute occurrences and bringing new insights lie within the prime focus of my task.

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