$160 billion evaporated in a single day! The crypto market flash crashed to $3.84 trillion, and Galaxy Digital wildly sold $1.18 billion BTC, triggering panic.

The global crypto market was severely impacted on Friday, plummeting 6.7% in a single day, erasing over $160 billion in total market capitalization and falling back to around $3.84 trillion, ending a four-week uptrend, with panic spreading throughout the market. The trigger for the big dump pointed to institutional whale Galaxy Digital's massive sell-off of Bitcoin (totaling over $1.5 billion), compounded by a wave of leveraged liquidations (over $721 million in 24 hours). BTC fell below $120,000, currently at $115,300, with ETH and XRP following suit. The alt season index dropped sharply to 40, indicating a weakening trend for small-cap coins. Although the Fear and Greed Index still shows 'Greed', analysts warn of technical breakdown risks, with BTC at $116,000 serving as a key support level, and the volatility in the crypto market may remain high in the short term.

Market Flash Crash: Four Consecutive Days of Gains End, $160 Billion Evaporated in a Single Day

The global crypto market experienced a sharp correction on Friday (July 25), with a daily big dump of approximately 6.7%, resulting in a loss of over $160 billion, and the current market capitalization hovers around $3.84 trillion. This big dump ended the previous four weeks of rising momentum (four consecutive bullish weekly candles), indicating that the bullish momentum driving digital assets close to historical highs is starting to weaken.

• Performance of Major Coins:
  • Bitcoin (BTC): Previously broke through the $120,000 mark, now significantly retracing to around $115,300, with a 24-hour fall of 2.6%.
  • Ethereum (ETH): fell 1.3%, currently priced at $3,596.
  • XRP (XRP): The fall deepened to 3.6%, currently trading at 3.07 USD. This round of widespread market correction is driven by various factors, including high leverage position liquidations and investor sentiment turning cautious.

Institutional Selling Pressure: Galaxy Digital's Massive BTC Dump Becomes the Catalyst

On-chain analytics firm Lookonchain reports that a major driver of the big dump was the well-known crypto investment bank Galaxy Digital conducting a large-scale Bitcoin sell-off.

1. Phase One Selling: Galaxy Digital sold 10,000 BTC, worth about $1.18 billion, putting heavy pressure on the market.
2. Funds Withdrawal: At the same time, the organization withdrew $370 million worth of USDT stablecoins from multiple CEXs, suggesting that it may have further selling plans.
3. Second Phase of Dumping: Following that, Galaxy Digital transferred another 2,850 BTC (worth about $330.44 million) to CEX. This strongly indicates that its dumping actions are not yet over, and traders are preparing for more impending market fluctuations. Galaxy Digital's cumulative dumping of BTC has exceeded $1.5 billion, becoming the core catalyst for this round of decline.

The Tragedy of Leverage: ETH, BTC, and XRP Lead the Liquidation Wave

The big dump in the market triggered a massive liquidation of high-leverage positions. According to data from the liquidation tracking platform CoinGlass:

• Over $721 million in leveraged positions were liquidated in the past 24 hours.
• Liquidation Distribution:
  • Ethereum (ETH): Leading the liquidation leaderboard, with a liquidation amount of 163.9 million USD.
  • Bitcoin (BTC): Following closely, Get Liquidated $155.5 million.
  • XRP (XRP): Get Liquidated nearly 49 million dollars. The surge in Get Liquidated highlights the extreme vulnerability of traders who overly rely on borrowed funds when prices suddenly fall.

Liquidation pressure continues:

• In just the past 12 hours, nearly $273 million worth of long positions (bullish bets) have been liquidated.
• The largest single liquidation order occurred in the BTC-USDT perpetual contract market of OKX exchange, worth up to 17.35 million USD.

Market Depth Analysis: The Nature of Pullbacks and Potential Risks

This sudden drop is seen as a natural pullback after a sustained rise. Previously, the total market capitalization of Crypto Assets had tested the $4 trillion mark, with altcoins rising significantly during the uptrend. However, the Altcoin Season Index has plummeted from its high to 40, indicating that the upward trend of small-cap tokens is weakening relative to Bitcoin.

• Institutional Factors: Institutional activity remains key to the current Fluctuation. Although the inflow of funds into Bitcoin ETFs continues to reflect long-term bullish interest, the rebalancing strategies of giants like BlackRock and Fidelity are believed to have caused temporary price dislocations.
• Overall Pressure: The operations of these institutions, combined with macroeconomic uncertainty and Whales taking profits, have collectively suppressed short-term market performance.

Retail Sentiment and Technical Concerns

Despite the market downturn, retail sentiment has surprisingly remained strong. The Crypto Fear & Greed Index still indicates it is in the "Greed" zone, suggesting that many traders still view this pullback as a buying opportunity rather than a bear market reversal.

Analysts warn: However, analysts caution that maintaining overly optimistic sentiment in the face of weakening technicals could lead to further fall risks.

• Technical Key Levels:
  • Bitcoin (BTC): has fallen below a key support level, and traders are closely watching whether the $116,000 area can stabilize, as this position has become a new battleground for bulls and bears.
  • Ethereum (ETH): Also under pressure, recently its validator queue has surged and is showing signs of a pullback, which may indicate a cooling of network activity.
  • XRP (XRP): has broken through the recent support level, and if the selling continues, it may test 2.72 USD.

Against the Trend Rise: Memecoins and Niche Tokens Perform Brightly

Not all assets suffered losses. The data platform's rise leaderboard shows that during the overall market decline, niche tokens such as Vine, The Innovation Game, and Pepecoin rose against the trend, with 24-hour increases of 44.7%, 46%, and 35% respectively, indicating that despite the overall weakness, funds are selectively flowing into specific sectors.

Conclusion: After the crypto market hit the 4 trillion mark, it was suddenly met with a "Black Friday." The over $1.5 billion BTC sell-off by Galaxy Digital was like a giant stone thrown into a calm lake, instantly triggering a tsunami of leveraged liquidations amounting to as much as $721 million. The key technical support level was breached (BTC 116K), the alt season index dropped to 40, and with multiple pressures from institutional rebalancing and Whale profit-taking, the short-term market has entered a high volatility risk zone. Although the Fear and Greed Index for retail investors still shows "Greed," the painful lessons of excessive leverage are still fresh. Whether the market can build effective support around $116,000 and when institutional selling pressure will ease will be crucial in determining the depth of the pullback and the future direction. Investors need to be cautious of sustained fluctuations, strictly control leverage risks, and patiently wait for signs of market stabilization.