Why is Crypto Market Going Down Today? XRP Price Dips 7%, BTC and ETH Follow

Over the past 24 hours, the cryptocurrency market experienced a downturn, with the total market capitalization decreasing by 1.23% to $3.66 trillion. Bitcoin retreated below the $114,000 mark and is currently trading around $113,715. Recently, Bitcoin, Ethereum, and several prominent altcoins, alongside traditional markets like the S&P 500 and Nasdaq, had entered overbought territory.

Bitcoin's Relative Strength Index (RSI), a key market indicator, has moderated to approximately 40, suggesting that the recent rally required a period of consolidation. Altcoins faced even more significant declines, with several top performers from the previous week reversing their gains. Ethereum decreased by over 2.70%, trading near $3,434. XRP experienced a 6.70% drop, while Binance Coin (BNB) fell by 2.97%. Solana (SOL) also declined by 2.42%, and Cardano (ADA) dipped by 1.12%. Dogecoin (DOGE) saw a loss of 3.39%, and SUI decreased by 3.41%.

This correction is viewed as a healthy reset rather than an indication of fundamental weakness. The broader altcoin market, as measured by the "Total 3" index (excluding Bitcoin, Ethereum, and stablecoins), had also become overheated and is now undergoing a cooling-off period. Key support levels for Bitcoin remain robust between $110,000 and $106,000, potentially leading to a price rebound later in the month.

Concurrently, there is notable momentum behind cryptocurrency investment. In July, U.S. crypto ETFs witnessed record inflows of $12.8 billion, with both Bitcoin and Ethereum attracting significant interest. On-chain data further reveals that wallets holding 10 or more BTC have continued to increase their holdings, demonstrating sustained long-term confidence.

Furthermore, recent U.S. job numbers were weaker than anticipated, leading traders to increasingly anticipate a Federal Reserve rate cut in September. The CME FedWatch tool now indicates an 81.9% probability of a rate cut, a substantial increase from the previous 37%. Coupled with delayed U.S.-China tariffs and discussions surrounding crypto regulations such as the Market Structure Bill, the conditions are being established for a potential surge in liquidity.