Why Crypto Market Is Down Today and Is Recovery Ahead? 3 Top Reasons
The crypto market is down today, July 1, 2025, showing a dip of nearly 2% in total market cap, which now stands at $3.26 trillion, according to CoinMarketCap. Surprisingly, the 24-hour trading volume has jumped over 7% to $103.76 billionโa sign of panic selling, liquidations, or aggressive dip-buying.
So, why crypto market is falling now? Letโs break down the 3 major reasons shaking the market right now.
1. Bitcoin Liquidation Hits $5.21M: Bulls Wiped Out
Bitcoin is leading the decline, now trading at $106,025, down 1.58% in the last 24 hours. The biggest hit came from leveraged traders, as perย Coinglass data.
BTC Long Liquidations: $5.08 millionBTC Short Liquidations: Just $128K
This Bitcoin liquidation map clearly shows bulls were heavily over-leveraged. When the price dropped suddenly, their positions were auto-liquidatedโfueling a cascading sell-off.
2. Trump vs. Elon Musk Political War Sparks Uncertainty
Political chaos is shaking industry confidence. The U.S. Senate is preparing to vote on Trumpโs controversial $4.5 trillion โOne Big Beautiful Billโ, which includes massive tax cuts and military fundingโbut at the cost of increasing national debt by over $3 trillion.
Elon Musk blasted the bill and warned every Congressman who supported it will be unseated. This high-voltageย Trump Elon Musk fight is creating market-wide uncertainty, which is one reason why cryptocurrencyย is down todayโinvestors are risk-averse in political storms.
3. Backed Finance Foundersโ DAOstack Link Shakes Web3 Trust
A new concern hitting theย crypto market crashย comes from Backed Finance, the team behind tokenized stock platform xStocks. All three founders were previously part of DAOstack, a Web3 project that raised $30M but collapsed in 2022. As xStocks deals in blockchain-based Real World Assets (RWAs), this past link has sparked fears of mismanagement. The news has rattled confidence in RWA and DeFi sectorsโadding to the reasons behind today's crash.
Sentiment Check: Fear or Opportunity?
Strangely, the Fear & Greed Index is still at 64 (Greed). Even with todayโs drop, sentiment still looks favorable. As per my experience being a cryptocurrency analyst, many traders see this time as a typical buy-the-dip rather than further trouble.
Source:ย Crypto Fear and Greed Index
Final Thoughts: Is This Just a Temporary Dip?
To conclude, the reasons why the crypto market is down today are a more complex issue:
1.ย Bitcoin price decrease, all due to significant long liquidations
2. Chaotic politics with Trumpโs bill and Muskโs tweets
3. Public trust is impacted by new tokenization projects
Either way, traders should pay attention to climbing trading volume and a greedy sentiment index, signaling that the situationย may reverse soon.
Also, Long term investors should continue to pay attention to major directions of movement through trusted sources, along with comprehensive crypto news today associated with potential good entry points in the industry.
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