The crypto market faced a sharp downturn on Wednesday, with the global market cap dropping over 2.5% to $4.1 trillion. The Crypto Market Fear & Greed Index also reflected weakening sentiment, sliding from 70 to 60 in just 24 hours — signaling caution among traders.
Bitcoin (BTC) led the decline, falling more than 4% from its all-time high of $126,200 to $121,257 due to massive profit booking. Ethereum (ETH) saw an even steeper 7% correction to $4,436, with higher liquidations than BTC. Analysts note that such behavior is typical during market euphoria phases, as traders lock in profits amid growing risk. Major altcoins like XRP, Solana (SOL), Cardano (ADA), and Hyperliquid (HYPE) plunged between 5% and 10%, while meme coins Dogecoin (DOGE) and Pepe Coin (PEPE) lost over 7%. Meanwhile, DoubleZero (2Z) and Plasma (XPL) posted heavy losses of 19% and 13%, respectively.
The selloff was primarily driven by widespread profit-taking from leveraged traders. Nearly 99.5% of holders were in profit, and short-term unrealized profits surged to 10% — conditions often preceding large dumps. Bitcoin’s open interest hit record highs, a pattern last seen before a 30% market correction. Onchain data revealed a major Bitcoin whale deposited 3,000 BTC to Hyperliquid, selling nearly 1,000 BTC worth $116 million, signaling possible distribution by long-term holders.
According to Coinglass, total crypto liquidations hit $700 million, with $550 million in longs wiped out. Over 180,000 traders were liquidated, with the largest single BTC-USDT order valued at $8.74 million.
The crash coincides with rising macroeconomic uncertainty ahead of the U.S. FOMC Minutes release. The 10-year Treasury yield steadied near 4.13%, while the U.S. Dollar Index (DXY) climbed toward 99 amid safe-haven demand. Despite the correction, analysts suggest this pullback could reset leverage and pave the way for Bitcoin’s next rally toward $135,000.
