Why Is Crypto Going Down Today? Profit-Taking, Liquidations, and Tariff Jitters Explained

As of late, Bitcoin and several Altcoins reached all-time or multi-month highs over the past week, which happens to be the primary reason behind today’s Crypto downturn. The profit-taking activity caused the traders to lock in gains from the recent rallies. This created increased selling pressure on all markets. Also, technical factors have contributed to the current market conditions.

On July 23rd, the crypto market finally experienced a significant market correction, but today’s market decline ended up erasing all gains made during the previous three days. This resulted in bringing the total cryptocurrency market capitalization to an unexpected loss of $111.32 billion within the last 24 hours. This article will further discuss why crypto markets are going down today, so keep reading to learn more. 

Is the Crypto Market Going Down?

Apparently, the crypto market slipped under $4 trillion, which is nearly 6% down in the last 24 hours. Crypto traders appear to be greedy, as sentiment remains unaffected by the fall in crypto prices. Even though the market faced a significant hit, Bitcoin, the market-leading digital asset, persisted relatively unfazed.

Bitcoin is said to have lost around 1.3% of its value on July 23, which is clearly less than some of the other currencies in the market. Among the 15 top cryptos by market cap, XRP and Dodgecoin led the downtrend, resulting in both losing over 10% of their value within a day. Other assets like Hedera, Cardano, and SUI seemed to have reported a significant price decrease of over 8%.

Growing Ethereum and XRP Liquidation 

It is clear that investors going long on Ethereum bets have incurred the most losses in the market today. To everyone’s surprise, both the XRP and Ethereum markets registered more liquidations than the Bitcoin market, even after having lower liquidity and trading volume. As per the current data, the market saw a total of $745 million in liquidations, and investors bet on a market increase to make up for 84.3% of these losses.

Even with all this going on, the Crypto Fear & Greed Index shows that the investor sentiment remains optimistically at the ‘greed’ level. The index also depicts a reading of 70 points, indicating that traders are still broadly optimistic regarding the market’s medium-term outlook. The sustained ‘Greed’ is also highlighting that today’s sell-off may be viewed more as a reset than a concern, with many investors still positioning themselves for upside once all these issues settle. 

Also Read: Cardano (ADA) Price Nears 2025 High – Bulls Eye $10 ADA Backed By Institutional And Retail Demand

Tariff Policy Deadlines at the Doorstep

Indeed, today’s market decline can and should be viewed as a part of a healthy market correction, with investors taking profits before relocating risky positions. However, it should be noted that this is arriving just days before the key tariff policy deadline on August 1st. The investor’s uncertainty has not only affected crypto, but Wall Street has also seen mixed results.

It is believed that Nvidia Corp slipped 3.3% in today’s market session, while Tesla edged up 0.6%. It happens to be that altcoins suffered the most of today’s retraction impact, thus suggesting that the divergence between speculative assets and Bitcoin’s relative stability may indicate the broader risk-off rotation in play. 

A shift in capital allocation became evident just as Bitcoin dominance dropped below 60% for the second time in three months. As a result, investors are rotating funds from Bitcoin into alternative cryptocurrencies and memecoins. This also shows the changes in investor preferences in the current market cycle.

As of late, the cryptocurrency market has been showing a mixed performance, with Bitcoin retreating from recent highs. It is believed that the main reason behind this downturn happens to be profit-taking activities. Technical factors also contribute to the current market conditions. Even with this downtrend going on, the crypto market is expected to rise again and showcase a strong comeback.