Why is crypto down today? Why did the BTC USD price slide below 112K, and Ethereum break under 4K?
The entire crypto market shed more than $162 billion in value overnight, with total market cap now at $3.81 trillion. Liquidations have surged to over $400 million overnight, with the biggest loss of $29 million in long.
The current situation could be a textbook flush as overleveraged traders are wiped out in a classic shakeout. It could be the end, but it could be just another chapter in crypto’s volatile cycles. But as we predicted yesterday, the current slump is not over.
BTC USD Price Dips: Why Is Crypto Down Today Amid ETF Outflows and Fed Signals?
One major reason why crypto is down today is the sudden reversal in ETF flows. According to multiple on-chain analysts, outflows from and ETFs totaled around $244 million are effectively ending a multi-week inflow streak. This coincides with the Federal Reserve’s 25 basis point cut which bring rates to 4.00%.
While many expected relief, Powell’s tone on inflation risks has kept institutions cautious. That stronger dollar is now weighing on risk appetite, pushing BTC USD price down to $111,758 and ETH to $4,020 when this article was written.
From a technical standpoint, this reminds the market of the post-rate-cut dip around mid-last year when BTC dropped 11% in a week. Support at 115K didn’t hold, and ETH losing the 4.2K mark was keeping altcoins under pressure. Still, this is a correction.
Funding rates, notably Ethereum, have flipped negative, a perfect sign of rising short interest. CoinGlass also shows declining open interest, which often precedes short squeezes when price bases hold.
(source – Funding Rate, coinalyze)
Why is crypto down today, even as some alts show strength? Altcoins like Solana are down 11%, but BNB holding above 1K shows selective resilience. DeFi TVL, per DeFiLlama, dropped just under 1%, which is not really catastrophic, as some analysts made it look.
Sentiment is deep in fear territory, but history tells us fear often precedes rebounds.
If BTC reclaims 114K and ETH finds footing, this correction will turn into a base for the next leg higher. Until then, accumulation of weakness is likely in the play. This is a patient trader’s market. And as always, the bold tend to win when others panic.
