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Why is Crypto Down Today? Here’s What You Need to Know
The cryptocurrency market experienced a sharp decline today, with the total crypto market cap dropping by $105-117 billion to reach $3.72 trillion. The sudden downturn was driven by over $700 million in leveraged long positions being liquidated across the market. Bitcoin fell 2.7% to trade at around $115,458, while XRP suffered a 12% drop to approximately $3.06.
The selloff was sparked by a break below support levels, with Bitcoin’s move below $117,261 triggering a cascade of forced selling that rippled throughout the ecosystem. Additionally, Ethereum faced downward pressure, falling 2-3% to trade near $3,600.
XRP led major cryptocurrency losses, plummeting 12% following reports that Ripple co-founder Chris Larsen transferred 50 million XRP tokens, resulting in approximately $140 million worth of assets being moved to centralized exchanges. The move led to a significant sell-off, with over $89 million in single-day liquidations.
Despite the decline, analysts remain cautiously optimistic about longer-term prospects. The recent selloff is viewed as a healthy correction following a 33% rally since late June. As such, many are not panicking and believe this downturn will ultimately lead to further growth for the market.
Meanwhile, other notable developments include reports of Tether mints $2 billion in USDT on Ethereum, fueling speculation over market rally potential. However, liquidity issues remain a major concern as the US M2 money supply reached a record $22 trillion, yet much of this funds is currently sitting in money markets or short-duration Treasury securities rather than flowing into risk assets like cryptocurrencies.
In other news, Solana fell 6.2% amid increased liquidation risk, with some analysts pointing to decreased spot demand and growing concerns over the platform’s sustainability. Dogecoin suffered a steeper decline of 10-18%, trading near $0.23.
The current market situation is reminiscent of recent trends in traditional markets.
Source: coincentral.com
