The decline triggered a liquidation cascade, as traders heavily positioned on the long side were forced to unwind once key support levels broke. Despite the temporary drop, analysts noted that fundamentals remain unchanged, viewing this correction as a healthy reset after weeks of overextended leverage. Broader sentiment in the crypto market stayed constructive, with traders expecting renewed inflows once macro uncertainty eases and institutional liquidity returns.
Market participants now watch for ETF inflow data and possible stabilization in derivatives funding rates, which could signal a short-term recovery.
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