The crypto market continued to weaken on Tuesday, with the total market value falling back to around $2.61 trillion. Among the top 100 tokens, 87 saw declines, with Bitcoin dropping to a level not seen since April of last year. Ethereum, XRP, Solana, and Dogecoin also saw concurrent declines.
Interest rate expectations suppress risky assets
This round of decline was first affected by macroeconomic expectations. Reports indicate that after U.S. President Donald Trump nominated Kevin Warsh to serve as the next Federal Reserve Chairman, concerns about interest rates remaining high in the market intensified. Warsh has always been regarded as a candidate inclined towards a tighter monetary policy, which put pressure on risk assets.
At the same time, the partial shutdown of the U.S. federal government has not yet been completely resolved, which has also exacerbated market risk aversion. When political uncertainty increases, funds typically withdraw from asset classes with higher volatility first, and as a result, the crypto market has been dragged down.
Bitcoin and Ethereum ETF continue to see outflows
The withdrawal of institutional funds is also an important reason for this round of decline. Last week, the total net outflow of Bitcoin spot ETF approached $1.5 billion, and products such as BlackRock, Fidelity, and Bitwise saw significant redemptions. The outflow of funds usually weakens the market's capacity to absorb demand and amplifies spot price fluctuations.
Ethereum also recorded a net outflow of nearly $460 million during the same period, indicating that institutional exposure to mainstream crypto assets is shrinking. For the market, this means not only that prices are weakening, but also that incremental buying orders are slowing down.
Liquidation amplifies the downward trend
After the price fell, the concentrated liquidation of leveraged positions further amplified the volatility. In the past 24 hours, the market clearing amount exceeded $800 million, with the majority coming from high-leveraged long positions. The largest single liquidation occurred at Hyperliquid; a liquidation of a position at BTC-USD amounted to approximately $15.46 million.
As liquidations increase, market sentiment has also clearly weakened. The Crypto Fear & Greed Index has dropped to 15, indicating a "extreme fear" zone, reflecting a rapid decline in the risk appetite of short-term funds.
Currently, Bitcoin is trading at around $77,324, which is close to the support level of $74,500 mentioned in the text. If it falls below this level, the market's focus will shift further down to the range of $68,000 to $70,000.
