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The crypto market just saw a big drop, wiping out more than $130 billion in a single day. After weeks of strong gains, this sharp pullback has left many traders asking one big question: Why is the market crashing now? Many see this drop as a mix of profit-taking, big liquidations, and weak ETF interest.
Let’s break it down.
Profit-Taking Kicked Things Off
The crash began with many traders cashing in on recent gains. Bitcoin had jumped nearly 17% in the past month, pulling altcoins up along with it. After such a strong rally, it was natural for some investors to lock in profits. This wave of selling added pressure across the board, especially on altcoins.
In just one day, the total crypto market dropped by 3.3%, but altcoins fell even harder. XRP plunged 12.4%, DOGE lost 14%, and PEPE dropped 13.5% — showing how quickly gains can vanish when traders rush to sell.
ETF Inflows Are Slowing Down
On top of profit-taking, institutional buying has slowed down too. The Spot Bitcoin ETFs saw three straight days of outflows, with $85.8 million leaving the market on July 23 alone. Fidelity led the charge, followed by ARK Invest and Bitwise.
Meanwhile, Ethereum ETFs are also cooling off. Inflows fell to $332 million, down sharply from $726 million the previous week. This slowdown suggests big players are waiting on the sidelines before placing new bets.
Liquidations Hit Traders Hard
Another big reason for the drop was the huge liquidation of leveraged positions. In the last 24 hours, over 314,000 traders were liquidated, wiping out $968 million, mostly from long trades. Bitcoin’s fall below $118,000 triggered a chain reaction of stop-losses and forced selling.
Ethereum saw nearly $195 million in liquidations, while XRP faced $113 million, showing how quickly high leverage can lead to a deep market flush.
SEC Pause and Fed Decision Add Worries
Adding to the nerves, the SEC decided to pause Bitwise’s new crypto index ETF. Many people thought this ETF would launch soon and bring fresh money into crypto. The reason? XRP’s ongoing legal issues.
On top of that, traders are waiting for the White House’s crypto report and the Federal Reserve’s next interest rate decision, both coming on July 30.
Is A Recovery Next?
Even with this big red day, many experts believe this is just a healthy break after a strong rally. Bitcoin bounced back to around $119,000 after dipping near $117,000. Some altcoins have already started to climb again.