The cryptocurrency market experienced a sharp sell-off on Wednesday. Many major altcoins, particularly Ethereum and XRP, reversed recent gains and experienced sharp declines. Analysts believe there's no clear trigger behind this correction. Ethereum and XRP Drop Sharply in Seemingly Unprovoked Correction: Analysts Call It “Profit Taking” Ethereum fell 4% to $3,565 in the last 24 hours, while XRP lost 12.7% to $3.05. Binance Coin (BNB) lost 5.3% and Solana (SOL) lost 9.5%. Bitcoin, on the other hand, fell 0.6% to $117,868, but remained more stable compared to the sharp decline in altcoins. No Clear Reason: “Respite” or “Profit Selling” “The market correction appears to be occurring without any apparent reason,” Presto Research analyst Min Jung said. This could be a natural respite from recent gains or profit-taking, he said. “Ethereum is still up 7% on a weekly basis, while Dogecoin is up 12%. This pullback appears to be more of a short-term correction,” he said. CoinW Strategy Director Nassar Al Achkar shared a similar view, saying, “This sharp pullback following recent rallies reflects temporary profit-taking. This is compounded by liquidations of leveraged positions and outflows from altcoins ahead of major ETF decisions.” Vincent Liu, Investment Director at Kronos Research, said the underlying reason for the crypto market decline was “consecutive liquidations amidst poor liquidity.” “Long positions using excessive leverage were liquidated, particularly in fragile altcoins,” he said. According to Coinglass data, a total of $837 million in liquidations occurred in the crypto market in the last 24 hours. $168 million of this came from Ethereum and $92.7 million from XRP long positions. Bitcoin saw total liquidations of $73.5 million. In leveraged trading, liquidation occurs when an exchange forcibly closes an investor's position due to insufficient collateral. However, analysts note that due to current API restrictions and incomplete reporting, reported liquidation amounts only reflect a fraction of the actual volume. Nick Ruck, director of LVRG Research, said the pressure on altcoins is driven by “waning retail investor interest.” However, he noted that investors are also closely monitoring geopolitical developments, institutional inflows into ETFs, and technical support levels. Presto’s Min Jung, however, argued that the long-term positive outlook remains valid: “Corporate treasury purchases in the crypto market continue to be strong. Market players are closely monitoring the financial statements and macroeconomic data releases of major tech companies.” While short-term fluctuations are commonplace in crypto markets, it will become clear in the coming days whether the current correction is a signal of a larger trend change. *This is not investment advice. Continue Reading: Altcoins Experience a Sharp Decline in the Cryptocurrency Market! Analysts Reveal the Main Reason for the Decline! Here Are the Details
