The global crypto market experienced a significant drop on Friday, losing about 6.7% of its value and wiping out over $160 billion from its total market cap. According to data from CoinGecko, the market cap now stands at around $3.84 trillion, signaling a pause in the bullish momentum that had propelled digital assets to near-record highs.
Bitcoin, which had recently surged above $120,000, retreated to around $115,300, marking a 2.6% decline over the past 24 hours. Ethereum also fell by 1.3% to $3,596, while XRP saw a steeper 3.6% daily loss, trading at $3.07. This market correction was driven by leveraged liquidations and shifting investor sentiment.
One of the major contributors to the sell-off was Galaxy Digital, which reportedly offloaded 10,000 BTC, worth approximately $1.18 billion, putting significant pressure on the market. The firm also withdrew $370 million in USDT from exchanges like OKX, Binance, and Bybit, indicating potential further sell-off plans.
Galaxy Digital’s continued selling spree, with another 2,850 BTC moved to centralized exchanges, has left traders anticipating more market volatility in the near future. This has led to massive liquidations totaling over $721 million in the past 24 hours, with Ethereum, Bitcoin, and XRP bearing the brunt of the losses.
The sudden downturn in the market reflects a natural retracement following an extended rally that saw the crypto market cap test the $4 trillion mark. Altcoins, which had seen significant gains during the surge, have since experienced a weakening trend relative to Bitcoin, as indicated by the Altcoin Season Index dropping to 40.
Despite the market correction, institutional activity, macroeconomic uncertainty, and profit-taking from whales continue to impact short-term performance. The Crypto Fear & Greed Index remains in the “Greed” zone, suggesting that many traders view the current dip as a buying opportunity rather than a bearish reversal.
Analysts caution against overly optimistic sentiment in the face of technical weakness, highlighting the importance of key support levels for Bitcoin, Ethereum, and XRP. While some assets have bucked the trend and posted gains, traders are advised to proceed with caution in the face of rising volatility and liquidations.
Overall, the road ahead for the crypto market appears choppy, with uncertainty looming despite strong long-term conviction. Investors must remain vigilant and adapt to the evolving market conditions to navigate the turbulent waters ahead.