Aaaaand… everything’s in a slump.
The total crypto market cap decreased by $130B in the past day.
Bitcoin dropped back to $115K, and altcoins followed.
… But why?
1/ Overleveraged traders got nuked
A whole lotta traders were going long – aka betting that Bitcoin’s price is gonna go up – with heavy leverage.
Quick explainer for the newbies: leverage means borrowing extra money from the exchange so you can make a bigger trade than your wallet actually allows.
You’re doing this because you think the price of Bitcoin is going to go up, and if it does, you make 10x more profit than usual.
But that also means the losses are gonna be bigger if it doesn’t.
So if the price drops, your position can get liquidated – meaning the exchange forcefully closes your trade so you don’t lose more than you have.
And this is how we get into this liquidation spiral:
A small dip triggered liquidations → exchanges had to sell Bitcoin to cover the losses → the price got even lower → more traders got liquidated → etc etc etc.
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2/ No real bullish narrative
There’s no major exciting news to drive the market right now.
And without a reason to be hyped, things get unstable – especially at high levels.
3/ Macro fears
The Fed’s next rate decision is coming on July 30.
Some had been hoping for a rate cut – especially since Donald Trump’s been publicly pressuring Fed Chair Jerome Powell to make it happen.
But that hope has faded. Inflation is still sticky, and Powell hasn’t shown any sign of giving in.
Without the promise of lower rates (which would be bullish for crypto), investors get nervy = more selling.
4/ Bitcoin was looking tired in general
Like we’ve been discussing lately, Bitcoin’s been losing momentum these days.
It was due for a cool-off after its recent highs. The pullback was expected.
So… now what?
According to trader Daan Crypto, if BTC loses the $115K – $120K range, we could see a dip to ~$113.5K – which might be a potential support zone.
For now, BTC is still holding within that range – but if altcoins keep selling off, it could get harder to stay there. Weakness in altcoins can sometimes mean overall risk-off behavior, which puts more pressure on BTC as well.
Maybe this is a sign that it’s time to go touch grass…
