The global crypto market cap has declined 3.9% to $3.53 trillion, marking the third consecutive day of heavy sell-offs as major cryptocurrencies, including Bitcoin, Ethereum, Solana, and XRP, posted steep losses between 3% and 8%. Analysts attribute the decline to profit-taking, macroeconomic uncertainty, and institutional repositioning ahead of key economic data releases in the United States.

Bitcoin and Ethereum Lead Market Decline

Bitcoin (BTC), the world’s largest cryptocurrency, fell 4.2% to $113,750, pulling back from its recent yearly highs. Meanwhile, Ethereum (ETH) dropped 5.1%, trading around $3,420, amid declining DeFi activity and muted inflows into spot ETFs.

Market experts noted that Bitcoin’s recent consolidation comes after a strong multi-week rally driven by institutional demand and optimism around U.S.–China trade progress. However, with macro headwinds resurfacing, short-term investors appear to be locking in profits, pushing volatility higher.

“This isn’t a structural breakdown,” said one market strategist. “We’re seeing natural corrections after months of strong gains. The long-term trajectory remains bullish as institutional participation continues to expand.”

Altcoins and DeFi Tokens Under Pressure

Altcoins faced the brunt of the sell-off, with Solana (SOL) down 7.8%, Avalanche (AVAX) losing 6.5%, and Cardano (ADA) slipping 5.2% in 24 hours. The DeFi sector also experienced notable declines as total value locked (TVL) fell nearly 4% overnight to $96 billion, indicating a pullback in on-chain liquidity.

In particular, Solana-based tokens saw heavier liquidation due to recent speculative inflows, while Layer-2 networks such as Arbitrum and Optimism faced moderate sell-offs as traders moved funds into stablecoins.

Institutional Flow and Market Sentiment Weakening

Data from major exchanges indicate declining spot volumes and reduced open interest in perpetual futures. Institutional desks reported a sharp increase in hedging activity, suggesting risk-off positioning amid ongoing geopolitical tensions and concerns about U.S. interest rate policy.

Stablecoins like USDT and USDC saw net inflows of over $1.2 billion, signaling a temporary shift toward safer digital assets within the crypto ecosystem. This behavior mirrors previous market cooling phases where investors opted to park funds in stable assets until volatility eased.

Market Analysts Maintain Long-Term Optimism

Despite the correction, long-term investors and analysts remain confident about crypto’s structural bull cycle. The total crypto market capitalization, still above $3.5 trillion, reflects continued growth from early 2024 levels, when it hovered below $2 trillion.

Experts point to rising adoption of stablecoins, blockchain integration in traditional finance, and the growing role of crypto ETFs as key pillars supporting the market’s resilience.

“Corrections are part of every growth cycle,” one crypto research analyst noted. “What matters is that institutional inflows, corporate treasuries, and global regulatory progress continue to strengthen crypto’s long-term fundamentals.”

Short-Term Volatility, Long-Term Strength

Traders expect continued volatility in the coming week as the market digests macroeconomic updates, including the U.S. jobs report and central bank statements. Analysts caution that BTC may retest $110,000 before finding strong support, while Ethereum’s $3,200 zone could serve as a critical level for buyers.

In the medium term, however, experts forecast renewed upside potential, particularly if institutional demand returns and macro conditions stabilize.

AQs

1. Why did the crypto market cap drop today?
The drop was driven by profit-taking, macro uncertainty, and institutional rebalancing, leading to widespread selling across major tokens.

2. How much has Bitcoin fallen during the sell-off?
Bitcoin has fallen approximately 4% in the last 24 hours and over 8% across the past three trading days.

3. Are altcoins performing worse than Bitcoin?
Yes. Altcoins such as Solana, Avalanche, and Cardano are facing steeper declines due to higher volatility and speculative trading activity.

4. Does this signal the end of the bull market?
No. Analysts consider this a short-term correction within an ongoing bullish cycle supported by strong fundamentals and institutional growth.

5. What should traders watch next?
Key factors include U.S. inflation data, ETF inflows, and institutional positioning in the futures and spot markets.