The cryptocurrency market evaporated $13.9 billion (approximately 193 trillion won) in a single day, showing a sharp decline. This sudden drop, occurring after several weeks of rising trends, was the result of a triple threat: short-term investors taking profits, excessive leverage liquidations, and a slowdown in institutional buying. Regulatory uncertainty and macroeconomic variables further dampened investment sentiment.
Particularly, BTC, which rose by about 17% in the past month, stimulated investors' desire to realize gains. As selling pressure spread, XRP dropped by 12.4%, Doge by 14%, and Pepe by 13.5%, with the altcoin market experiencing an even greater shock.
The ETF market flow also fell short of expectations. In the spot Bitcoin ETF, funds have been withdrawing for three consecutive days, with $85.8 million (approximately 11.92 billion won) outflowing on July 23rd alone. Fidelity, ARK Invest, and Bitwise were identified as the main sources of outflow. The ETH ETF situation was no different. Net inflows were $332 million (approximately 461.7 billion won), a decrease of more than half from the previous week's $726 million (approximately 1.087 trillion won).
The scale of liquidations added further shock to the market. According to Coinglass, approximately 314,000 investors were forcibly liquidated within 24 hours, causing leverage positions totaling $968 million (approximately 1.3465 trillion won) to disappear. Among these, ETH recorded $195 million (approximately 271.1 billion won) and XRP $113 million (approximately 157.4 billion won) in liquidations, demonstrating how excessive leverage can lead to significant losses.
Uncertainty was also compounded from an institutional perspective. The SEC's decision to withhold approval for Bitwise's new cryptocurrency index ETF reignited concerns about regulatory uncertainty. This is analyzed to be related to the existing legal status of XRP. Some traders immediately reacted that "institutions are waiting to enter the market, and confusion is being deliberately induced".
With the White House's cryptocurrency-related report scheduled for July 30th and the Federal Reserve's interest rate decision coinciding, short-term disappointment sell-offs poured in. If the Fed maintains a hawkish stance to guard against inflationary pressures, cryptocurrencies as risk assets could face additional downward pressure.
However, after BTC dropped to the $117,000 (approximately 162.63 million won) range and quickly rebounded to the $119,000 (approximately 165.41 million won) range, many cryptocurrencies are attempting rapid recovery. Some market experts assessed that "this decline is a normal adjustment needed to cool an overheated market".
Experts emphasize that risk management strategies are more crucial than ever, advising investors to absorb this sharp decline while preparing for high volatility.
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