Why Is Crypto Down Today? July 29, 2025

After weeks of green candles and renewed optimism, crypto prices took a sudden dip. On July 29, 2025, the total market cap dropped 2.37% in 24 hours, extending a week-long decline.

This follows a 30-day rally where Bitcoin and altcoins saw double-digit gains. So what caused the pullback?

In short, traders hit resistance at key price levels, institutional money shifted into safer assets, and the derivatives market added fuel to the fire. Let’s break down the key drivers behind today’s market decline.

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Key Takeaways

1. Profit-taking hit near all-time highs, with Bitcoin dominance rising as traders locked in gains.

2. Altcoins were hit harder, as leveraged long positions were liquidated in a wave of selling.

3. ETF outflows and technical breakdowns added pressure, dragging prices below key support levels.

Profit-Taking at Resistance Levels

The first and clearest reason for the pullback is profit-taking. The total crypto market cap briefly touched $3.98 trillion on July 23 but failed to break through that level.

This signaled a rejection at resistance and triggered a wave of selling. Traders who had held positions during the rally decided it was time to lock in profits, especially in overbought altcoins like NEAR and PUMP, which fell 9.3% and 3.9%, respectively.

Bitcoin’s market dominance rose to over 50.56% as capital rotated out of altcoins into perceived safer assets.

This rotation is a common behavior in uncertain phases when investors expect volatility. Bitcoin is often seen as a more stable store of value compared to smaller, riskier altcoins.

At the technical level, a price drop below the 7-day simple moving average (SMA) at $3.88 trillion, along with a bearish MACD crossover, confirmed the loss of bullish momentum.

Unless the market can recover and close above the 23.6% Fibonacci level at $3.8 trillion, the risk of further downside remains.

Watch for: Signs of consolidation near $3.8T or a rebound above resistance to renew bullish confidence.

Read Also: Why Did the Crypto Market Crash Today? Here’s the Analysis You Need to Know

Derivatives Market Under Stress

Another major factor contributing to today’s drop is the stress in the derivatives market. Over the past 24 hours, perpetual futures trading volume surged by 61% to reach $1.55 trillion.

At the same time, open interest also increased by 8.3% to hit $710 billion. This shows that traders were placing more aggressive bets, which often leads to higher volatility.

Unfortunately, that aggression backfired for many. A total of $38.4 million in Bitcoin long positions were liquidated, pushing prices lower in a cascading effect.

Altcoins were hit the hardest as open interest spiked and leverage built up. When the market turned, many overextended long positions were forced to close, accelerating the downside.

The average funding rate also moved slightly higher, which is typically a sign of bullish positioning.

However, in this case, it added to the downside pressure as those bullish traders were forced to exit in a hurry.

What it means: Traders became too optimistic too quickly, and the market punished excess leverage.

Watch for: A cooling off in perpetual volume and a reduction in liquidations below $30 million to signal balance returning to the market.

Read Also: Crypto Market Crash? Here’s Why Prices Are Dropping Today

ETF Outflows and Altcoin Rotation

While technicals and leverage played a major role in the drop, institutional behavior is also shaping market trends.

Over $175 million Bitcoin ETF Flows were recorded, suggesting that large investors were pulling back. This triggered a rotation out of Bitcoin and especially altcoins, as risk appetite faded.

Interestingly, some of this capital may have rotated into ETH and SOL, which have shown relative stability.

However, the broader altcoin market felt the pressure, especially tokens that had risen sharply over the past month.

With fewer fresh inflows and capital moving toward larger assets, altcoins face a tough uphill battle in the short term.

ETF flows have been a major trend to watch in 2025, especially with ETH ETFs seeing consistent daily inflows for the past 17 days.

If this trend continues, Ethereum may absorb more capital, but it also depends on upcoming macroeconomic signals.

Watch for: Continued ETH ETF inflows, Bitcoin ETF outflows, and the next Federal Reserve update for market direction.

Read Also: Crypto Bill Today: A Huge Win for the Crypto Industry

Conclusion: Short-Term Pain, Long-Term Signals

The current dip in crypto prices is not unexpected after such a strong run-up. It reflects healthy consolidation as the market resets after a 30-day rally.

Factors like profit-taking, ETF rotation, and overleveraged traders all played a role in triggering the decline.

While it may feel discouraging in the short term, this correction could be setting the stage for the next wave of movement.

Much will depend on whether Bitcoin can hold support around $3.8T and if altcoins can rebuild momentum without excessive leverage. For now, cautious optimism and tight risk management are key.

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FAQ

Why did crypto prices drop today?

The market pulled back due to a combination of profit-taking, ETF outflows, and a wave of liquidations in the derivatives market after hitting key resistance levels.

Which coins were affected the most?

Altcoins like NEAR and PUMP saw steep drops, while Bitcoin and Ethereum remained more stable. The entire market declined by 2.37% in 24 hours.

What is Bitcoin dominance, and why does it matter?

Bitcoin dominance measures Bitcoin’s share of the total crypto market. A rising dominance often signals that investors are seeking safety in Bitcoin over riskier altcoins.

How does ETF activity affect the market?

Large outflows from Bitcoin ETFs suggest that institutional investors are pulling capital, which can lead to broader market weakness and shift capital to other assets like ETH.

Is this the start of a longer downturn?

Not necessarily. This could be a short-term consolidation after a strong rally. Market sentiment will depend on support levels, ETF flows, and upcoming macroeconomic signals.

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