Cryptocurrencies Plunge Up to 12% as Bitcoin Falls Below $118,000
The correction is also showing in the crypto-linked exchange-traded funds (ETFs). Spot Bitcoin ETFs saw two straight sessions of outflows.
Quick overview
- Cryptocurrencies are facing significant losses today, with Bitcoin dropping 1.6% and Ethereum falling 3.7%.
- Altcoins experienced even larger declines, with Ripple and Dogecoin down over 10%.
- Analysts view the downturn as healthy profit-taking rather than a sign of a deeper market reversal.
- Institutional interest in crypto remains strong, bolstered by new regulations and potential Federal Reserve rate cuts.
Cryptocurrencies are experiencing sharp losses this Wednesday after several weeks of strong gains. Bitcoin (BTC) fell 1.6%, slipping below the $118,000 threshold to around $117,924, according to Binance. Ethereum (ETH) dropped 3.7% to $3,566.94.
Altcoins posted even steeper declines, with Ripple (XRP) and Dogecoin down 10.5%, followed by Cardano (ADA) (-9.8%) and Solana (SOL) (-7.1%). Meanwhile, BNB fell 1.9% to $761.75, and Tron (TRX) dropped 1.8% to $0.3077.
Despite the sell-off, analysts view the downturn as a healthy round of profit-taking, not a sign of a deeper reversal. Both BTC and ETH had recently touched new highs—Bitcoin hit a fresh all-time record, and Ethereum climbed to its highest level since late 2024.
ETFs Reflect Consolidation Phase
The correction is also showing in the crypto-linked exchange-traded funds (ETFs). Spot Bitcoin ETFs saw two straight sessions of net outflows, following twelve consecutive days of inflows totaling over $6.6 billion. However, the recent outflows were smaller than any single day of inflows since July 9.
On the other hand, Ethereum ETFs continue to attract capital, with 13 consecutive days of net inflows. According to CoinShares, crypto investment products registered a record $4.39 billion in weekly inflows, surpassing the previous peak of $4.27 billion seen after the U.S. elections in December 2024.
Institutional Support Remains Strong
Analysts remain confident that institutional appetite for crypto is growing, supported by:
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- New pro-crypto regulations recently passed in the U.S.
- Moves by major corporations like Trump Media, which added Bitcoin to its balance sheet.
- A shift in traditional banking, highlighted by reports that JPMorgan Chase is considering crypto-backed loans—a major reversal for CEO Jamie Dimon, who once called Bitcoin a “fraud.” He now says: “I support your right to buy Bitcoin. Go ahead.”
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Fed Outlook Adds to Optimism
Adding to the favorable outlook is the possibility of rate cuts by the Federal Reserve later this year. Slowing inflation in the U.S. has led analysts at Goldman Sachs to project three 25-basis-point cuts by year-end—conditions that typically favor risk assets like cryptocurrencies.
In summary, while today’s drop may seem steep, it’s part of a broader consolidation within an ongoing bullish cycle, underpinned by institutional adoption, ETF momentum, and regulatory clarity.
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