The cryptocurrency market recorded more than $669 million in net liquidations on Wednesday, July 23, 2025. The altcoin market accounted for the lion’s share of the $563 million in long liquidations during the past 24 hours.

According to market aggregate data from Coinglass, the ETH and XRP trading pairs recorded net liquidations of about $126 million and $69 million respectively. Bitcoin (BTC) on the other hand recorded a net liquidation of around $54 million.

Major Reasons Why Crypto Dropped Today

The 2025 altcoin bull market officially kicked off after the Ethereum price outpaced Bitcoin, leading to a reversal in the BTC dominance. The rising calls for altseason 2025 attracted more FOMO (fear-of-missing-out) traders, thus leading to overheated futures.

According to market data analysis from CryptoQuant, an overheated futures market amid weak prices often leads to a distribution phase. Additionally, market data analysis from Santiment shows the social volume and dominance for altseason 2025 surged to yearly peaks after Ether price approached $4k.

Historically, an increase in social dominance of ATH often precedes a market correction.

The heavy liquidation of long traders has also triggered panic selling, thus increasing the odds of a long squeeze.

What Next?

The crypto market has gained bullish momentum fueled by clear regulatory frameworks in the United States amid renewed demand from institutional investors. The rising global money supply will further boost the crypto bull market in the coming months. 

As a result, the wider crypto market is likely to be trapped in a short-term consolidation before a parabolic rally before the end of 2025. The macro bullish sentiment is bolstered by BTC’s entrance into price discovery.