The cryptocurrency market saw a sharp correction overnight, wiping out nearly $176.6 billion in total market capitalization. Bitcoin and Ethereum lead the decline as leveraged positions surge across all exchanges. Traders are closely monitoring critical support levels amidst forced selling and macroeconomic tensions, revealing heightened structural vulnerability exacerbated by excessive leverage.
The total crypto market capitalization has plunged by 5.7% from yesterday’s peak, falling below the symbolic threshold of 3 trillion dollars before stabilizing around 2.9 trillion. Even after this technical rebound, the market is still down 4% over the last 24 hours. This correction is not trivial: it reflects a dangerous accumulation of leveraged long positions that collapsed in cascade.
Bitcoin has lost 4.1% and is currently testing the major support at 85,200 dollars. This technical level has already absorbed several waves of selling pressure and constitutes the line of defense between a simple consolidation and a deeper correction. Ethereum shows an even sharper decline of 6.5%, confirming the fragility of altcoins in the face of negative risk sentiment.
Over 576 million dollars of long positions were liquidated in 24 hours, primarily on BTC and ETH. These forced exits do not result from new bearish conviction but from a chain reaction: when the price breaks through certain thresholds to the downside, stop losses trigger automatically, accelerating the drop in a feedback loop. Hyperliquid (HYPE) perfectly illustrates this dynamic with a drop of 9.4%, becoming one of the biggest losers among the top 100 cryptocurrencies.
This liquidation mechanism explains why losses were so abrupt and widespread, even in the absence of a specific negative catalyst for the crypto sector.
The macroeconomic context has clearly weighed on risk assets. Financial markets remain nervous ahead of monetary policy announcements from the Bank of Japan, where speculation about tightening financial conditions has cooled appetite for volatile assets. Gold has climbed to 4,305 dollars, just 80 dollars from its all-time high, while Bitcoin dropped below 86,000 dollars.
This divergence between gold and Bitcoin has not gone unnoticed by analysts. The BTC/Gold RSI ratio has fallen below 30, a threshold that has historically marked long-term bottoms for Bitcoin. This technical signal is fueling discussions about a potential asset rotation: investors are temporarily favoring the safe haven value of gold in the face of prevailing uncertainty.
Paradoxically, spot XRP ETFs are defying this bearish trend by recording 20 consecutive days of capital inflows, approaching one billion dollars cumulatively. By comparison, Bitcoin and Ethereum ETFs have experienced combined outflows of 4.6 billion dollars. Despite these positive flows, XRP’s price remains weak, highlighting a disconnect between institutional demand and spot market reaction.
From a structural perspective, the total crypto market capitalization now shows a 32% decline from its October peak. The 3 trillion dollar threshold has transformed into a major psychological pivot. A reclaim above 3 trillion, followed by a break above 3.25 trillion, would be necessary to stabilize sentiment and reopen the bullish trajectory toward 3.59 then 3.94 trillion.
On the support side, the market is currently holding above the critical zone between 2.81 and 2.73 trillion dollars. A sustained break below this floor would aggravate bearish risks and signal that the distribution phase is not over.
For Bitcoin, the level at 85,200 dollars remains critical. A loss of this support would expose 83,500 dollars, then 80,400 dollars in case of accelerated liquidations. Conversely, a recovery above 90,700 dollars would indicate a return of buyers and open the path toward 94,500 dollars, although this zone remains a major decision point rather than a bullish confirmation.
Furthermore, a long cluster sits at 83,600 dollars and it’s also the bottom of a major Order Block in higher timeframes. It’s therefore a zone to monitor in the coming days.
A positive element: long leverage is decreasing alongside falling prices, thereby reducing the risk of new massive forced sales. This purge of excessive leverage could paradoxically clean up the market in the medium term.
Related content:
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
