No Clear Trigger for the Correction: Analyst Insights
According to Min Jung, Research Analyst at Presto Research, the decline resembles "a breather or profit-taking after a period of growth" rather than a response to any macroeconomic catalyst. Even after the drop, Ethereum remains up 7% for the week, and Dogecoin is still 12% higher, highlighting the localized nature of this current sell-off.
CoinW’s Chief Strategist Nassar Al-Achkar echoes this sentiment: “The abrupt pullback is the result of temporary profit-taking after a rally, exacerbated by mass liquidations of long positions and a rotation of capital out of altcoins as traders anticipate ETF decisions.” Beyond a technical correction, the market is experiencing structural shifts in positioning.
Liquidations Amplify the Downturn: Numbers and Market Structure
Vincent Liu, CIO at Kronos Research, points to “cascade liquidations and a liquidity drain” as a key factor, especially amid over-leveraged longs in fragile altcoins. Over the past 24 hours, data from Coinglass shows total liquidations exceeded $837M. Of this, $168M involved Ethereum ($142.4M in long positions), while XRP saw $92.7M in long liquidations.
For comparison, Bitcoin liquidations totaled $73.5M, with $57.4M attributed to longs. These events occur when traders’ positions are automatically closed due to insufficient margin or hitting stop-loss thresholds. The actual size of the liquidation wave may be even larger, as data aggregators can only track a portion of all trades due to technical limitations.
Market Outlook: What’s Next for Crypto?
The pressure on altcoins is being compounded by waning retail interest, note analysts at LVRG Research. As a result, traders are watching geopolitical developments, institutional ETF flows, and key support levels for major crypto assets.
Despite the pullback, the macroeconomic backdrop remains largely positive: Min Jung observes that “corporate treasuries are still actively accumulating digital assets.” In addition, market focus is shifting toward upcoming corporate earnings from major tech giants and new global economic data, both of which could steer the next phase for the crypto market.