Why Is the Crypto Market in a Funk? 🤷‍♂️ BTC, ETH, and XRP Take a Tumble

by

In the realm of digital currencies, where fortunes can be made and lost in the blink of an eye, a somber mood has descended upon the market. Over the past 24 hours, the global crypto market cap has experienced a notable decline, slipping by over 2.4% to a sum of $3.78 trillion. The once-mighty titans of the crypto world, Bitcoin and Ethereum, have not escaped this melancholy fate. Bitcoin, with a heavy heart, has fallen by more than 2%, now languishing at approximately $115,957, while Ethereum, with a similarly sorrowful expression, has slipped over 3.6% to $3,717.

The plight of the altcoins is even more dire. Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) have each faced their own trials, plummeting by 4.8%, 4.89%, and 5.87% respectively. XRP, too, has not been spared, dropping by a modest 3.7%. The Altcoin Season Index, a barometer of the market’s whims, has dipped to a mere 37 out of 100, a clear indication that Bitcoin remains the star of the show, basking in the spotlight while its peers struggle in the shadows.

What Has Brought About This Sudden Despair?

The current downturn in the crypto market can be traced back to the murky waters of macroeconomic uncertainty. The U.S. Federal Reserve, in a move that has sent ripples through the financial world, chose to maintain interest rates at their current levels, accompanied by a stern warning about the prospects of economic growth. Initially, there was a brief moment of optimism when the White House unveiled a crypto policy report advocating for clearer SEC guidelines. Alas, this glimmer of hope was short-lived, as the Fed’s cautionary message took hold, casting a shadow over the market.

To add insult to injury, the total liquidations across the crypto market have soared to nearly $631.98 million. In times of economic gloom, capital tends to seek safer havens, and the altcoins, being the more adventurous and risky of the bunch, are the first to feel the chill. The crypto market, no longer insulated from the broader economic climate, finds itself swayed by the same forces that influence stocks and commodities.

As of August 1st, the aggressive tariff strategy of President Donald Trump begins to exert its influence. While tariffs have long been a source of concern for traditional markets and international trade, their impact is now being felt in the crypto sphere. Tariffs, with their potential to spark inflation and destabilize fiat currencies, might, in theory, drive investors towards Bitcoin and other digital assets as a safe haven. However, in the short term, they often lead to liquidity shortages and hasty sell-offs, particularly among the more speculative altcoins.

Read More

2025-08-01 06:52