The cryptocurrency market experienced a significant downturn on Wednesday, July 23, 2025, with over $669 million in net liquidations reported. The majority of these liquidations, totaling $563 million, came from the altcoin market.
Coinglass, a market aggregate data provider, revealed that ETH and XRP trading pairs saw net liquidations of approximately $126 million and $69 million, respectively. Bitcoin (BTC) also recorded a net liquidation of around $54 million.
One of the major reasons behind the drop in the cryptocurrency market today was the commencement of the 2025 altcoin bull market. This was triggered by Ethereum surpassing Bitcoin in price, leading to a reversal in BTC dominance. The increasing buzz around altseason 2025 attracted more FOMO traders, causing futures to become overheated.
CryptoQuant’s market data analysis highlighted that an overheated futures market during weak prices often results in a distribution phase. Additionally, Santiment’s data showed a surge in social volume and dominance for altseason 2025 as the price of Ether approached $4,000. It is worth noting that a spike in social dominance typically precedes a market correction.
The heavy liquidation of long traders also contributed to panic selling, raising the likelihood of a long squeeze in the market.
Looking ahead, the cryptocurrency market is expected to gain bullish momentum due to clear regulatory frameworks in the United States and increased demand from institutional investors. The global money supply is projected to further fuel the crypto bull market in the coming months.
As a result, the overall crypto market may undergo a period of short-term consolidation before embarking on a parabolic rally by the end of 2025. The optimistic outlook is supported by Bitcoin’s entry into price discovery territory, signaling positive sentiment in the market.