The crypto market saw a sharp sell-off, pushing total market capitalization down to $2.66 trillion, a drop of more than 6% in 24 hours. Nearly $500 billion has been erased over the past few days. Bitcoin, Ethereum, XRP and other major tokens all moved lower, with losses spreading across the market as spot traders and leveraged positions came under pressure.
Rate concerns hit crypto and equities at the same time
The main driver behind the decline was renewed anxiety over interest rates. News tied to a new US Federal Reserve leadership appointment led investors to fear that monetary policy could stay tighter for longer. That kind of outlook usually weighs on volatile assets such as cryptocurrencies, as capital shifts toward safer holdings. The reaction was fast, and sentiment turned decisively negative.
US stocks and crypto also fell in tandem. Over the last week, digital assets have shown a strong correlation with US equities, highlighting how closely crypto is now reacting to moves in traditional financial markets.
Forced liquidations accelerated the drop
The sell-off intensified once liquidations started to cascade. As prices fell, leveraged long and short positions were forced out. Over the last three days, close to $5 billion in leveraged positions were liquidated. Exchanges automatically sell assets to cover those losses, and that process adds fresh selling pressure. Once that loop starts, declines can speed up quickly.
Ethereum weakness dragged on the broader altcoin market
Ethereum was hit especially hard during the move lower. Reports pointing to large unrealized losses among institutional players added to concerns around ETH and weighed on the wider altcoin segment. As Ethereum weakened, confidence across the market fell with it, prompting traders to reduce risk exposure.
Among major cryptocurrencies, Bitcoin fell about 13%, losing nearly $265 billion in market value. Ethereum dropped around 25%, wiping out roughly $91 billion. XRP declined close to 22%, erasing about $24 billion, while Solana slid more than 23%, losing roughly $16 billion.
Fear and Greed Index drops to 18 as traders watch $77,000 on Bitcoin
Market sentiment has turned sharply bearish. The Fear and Greed Index fell to 18, which is classified as Extreme Fear. Some technical indicators now point to oversold conditions, suggesting prices may have dropped too far in too short a period.
In the near term, traders are watching whether Bitcoin can hold support at $77,000. A break below that level could open the door to more downside. The market is also waiting for upcoming signals from the US Federal Reserve to gauge whether prices can stabilize or if another wave of selling is still ahead.