Liquidations Top $655 Million as Crypto Markets Drop for Second Day

The cryptocurrency market experienced continued volatility over the past 24 hours, with Bitcoin, Ethereum, and other major digital assets dropping sharply for a second day.

Bitcoin (BTC) has dropped 4% in the last 24 hours, trading near $93,467, while Ethereum (ETH) has fallen 6.3% to $3,239. XRP slipped by 3.5% to $2.23, and Solana (SOL) fell 8.1% to $190. The overall cryptocurrency market cap decreased by 6.2%, now standing at $3.42 trillion, according to CoinGecko.

In the past 24 hours, nearly a quarter of a million leveraged traders were liquidated for a total of $656 million, according to CoinGlass. Altcoins accounted for around $160 million in liquidations, while BTC followed with $135 million, and ETH recorded around $115 million in liquidations.

Experts attribute the selloff to economic uncertainty and concerns over potential regulatory changes. Unemployment has risen to 4.2% from 3.7% last year, with key industries seeing slower hiring. Instead of layoffs, many companies are curbing labor costs by reducing new hiring, according to Barron’s. A cooling labor market and persistent inflation fears have increased investor caution, experts said.

“Today's losses reflect growing anxiety over tighter monetary policy and the impact of rising bond yields on liquidity,” Sidney Powell, CEO at Maple Finance, told The Defiant. “For crypto, the increasing involvement of institutional players has linked it more closely to broader market conditions.”

Powell emphasized that cryptocurrency now reacts to the same macroeconomic factors as equities, such as unemployment rates, inflation and interest rate movements. Despite growing institutional participation, crypto remains a risk asset, which makes it more prone to sharp sell-offs during market panics, as seen in August.

Azeem Khan, co-founder and COO of Morph, shared a similar viewpoint, stating that while there is optimism surrounding President Trump's upcoming term, market uncertainty remains high.

“While campaign slogans and promises generated excitement, the real challenge lies in translating them into actionable policies,” Khan said. “Investors are left wondering how his administration will navigate these uncharted waters.”

FOMC Minutes

This decline also comes ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes later today, which will provide insights into the Federal Reserve's recent discussions and decisions.

Three weeks ago, the Federal Reserve reduced its benchmark interest rate by 0.25 percentage points to a range of 4.25%-4.5%, the lowest since February 2023. Although this move aimed to boost the economy, the Fed's cautious outlook on future rate cuts created uncertainty, experts said.