Crypto Market Crash Wipes Out $130 Billion — What Triggered the Sell-Off?

The crypto market faced a sharp correction on July 24, 2025, wiping out over $130 billion in value within 24 hours. After weeks of steady gains, major assets like Bitcoin (BTC), Ethereum (ETH), and top altcoins nosedived, leaving investors questioning: Why is crypto down today?

The sell-off is being attributed to a perfect storm of profit-taking, ETF uncertainty, regulatory anxiety, and massive liquidations that rattled confidence across the board.

Bitcoin Rally Sparks Profit-Taking Frenzy

Bitcoin had enjoyed a 17% rally over the past month, drawing in both retail and institutional investors. But as BTC neared key resistance levels near $119,000, many traders began locking in profits.

This triggered a domino effect across the market, especially among altcoins, which tend to follow Bitcoin’s lead with exaggerated moves. Within a single trading session:

• XRP plummeted 12.4%
• Dogecoin (DOGE) dropped 14%
• PEPE declined 13.5%

These sharp declines dragged the total crypto market cap down 3.3% in one day.

ETF Outflows and Regulatory Delays Spook Investors

Adding to the negative sentiment was a slowdown in ETF inflows. Spot Bitcoin ETFs saw $85.8 million in net outflows on July 23, with major players like Fidelity, ARK Invest, and Bitwise leading the exits.

Ethereum ETFs also saw reduced interest, with inflows sliding from $726 million last week to just $332 million.

Meanwhile, the SEC put the brakes on Bitwise’s new crypto index ETF, citing ongoing legal concerns around XRP. This move cast doubt on the regulatory clarity investors were hoping for, especially with more altcoin ETFs under review for late 2025 approval.

Nearly $1 Billion in Long Liquidations

One of the biggest triggers for the market downturn was a surge in liquidations. Over 314,000 traders were liquidated in 24 hours, resulting in $968 million wiped from leveraged long positions.

• Ethereum led with $195 million in liquidations
• XRP followed closely with $113 million
• Binance saw over $29 million cleared across positions

This wave of forced selling amplified the downward pressure and deepened losses, especially for over-leveraged altcoin traders.

Global Uncertainty Adds to the Volatility

Beyond crypto-specific events, macroeconomic and geopolitical factors are adding further strain.

• Investors are waiting on the July 29–30 FOMC meeting, which may set the tone for U.S. interest rates.
• The White House is set to release a major crypto regulatory report, and looming tariff deadlines have traders worried about broader market stability.

Negotiations with countries like Canada, Mexico, Brazil, and the EU remain unresolved, creating unease that is spilling over into risk assets like crypto.

A Healthy Pullback or Start of a Deeper Correction?

Despite the sell-off, market analysts remain cautiously optimistic. Bitcoin is still trading around $117,600, just 4% shy of its all-time high, and key technical indicators suggest this correction could be a standard retracement in a broader bull cycle.

Momentum indicators like the Relative Strength Index (RSI) and wave counts indicate that the uptrend remains intact. Many view this downturn as a breather after a parabolic breakout that began in early July.

What’s Next for the Crypto Market?

As volatility cools and institutional players return from summer breaks, analysts believe the market could gear up for another rally. The upcoming ETF decisions and potential Fed rate cuts in September could serve as major catalysts.

Additionally, with altcoin spot ETFs for Solana, Ripple, Litecoin, and others likely to receive approval by year-end, the second half of 2025 may usher in renewed momentum — especially if inflation remains in check and macroeconomic data turns favorable.

For now, however, traders should brace for continued short-term volatility while keeping an eye on strong support levels like $117,000 for Bitcoin and $3,500 for Ethereum.

Bottom Line

The crypto market dip on July 24, 2025, appears to be a mix of short-term technical correction, profit-taking, and macro uncertainty — not a full-scale reversal. Smart investors are watching support levels and waiting for clarity from the Fed, SEC, and ETF markets before making their next move.