Bitcoin, Ethereum, and XRP Tumble: Why Crypto Crashes as Stocks Soar to New Heights

Digital assets are taking a beating while traditional markets party like it's 1999. Bitcoin, Ethereum, and XRP are all in the red, a stark contrast to the record-breaking rallies on major stock indices. What's driving the great divergence?

The Liquidity Labyrinth

Forget complex theories—follow the money. When central banks hint at tightening the taps, the speculative froth gets wiped off first. Crypto, with its 24/7 volatility, often acts as the canary in the coal mine for global risk appetite. Capital isn't disappearing; it's rotating into perceived 'safe havens'—or at least, the old-fashioned kind.

Regulatory Roulette

Uncertainty is the market's kryptonite. While stocks operate within established frameworks, the crypto landscape remains a regulatory wild west. Every new rumble from a senate hearing or a regulatory body sends shockwaves through decentralized networks, creating a sell-first-ask-questions-later mentality among skittish investors.

The Narrative Shift

'Digital gold' and 'Web3 future' are powerful stories, but they're competing with a resurgent 'old economy' narrative. When inflation data drops and corporate earnings beat expectations, the spotlight swings back to tangible profits and dividends—something your average memecoin can't quite muster. It's a classic clash of speculative potential versus quarterly results.

This isn't crypto's first rodeo, and it won't be its last. The decoupling from traditional assets is a feature, not a bug, of this nascent asset class. While Wall Street brokers toast their all-time highs with champagne, the crypto faithful are quietly accumulating—betting that today's crash is merely tomorrow's discount. After all, in finance, the only thing more predictable than a boom is the bust that follows it.

The crypto market continues to slide, and even the biggest names like Bitcoin, Ethereum and XRP are unable to escape the intense selling pressure. While global markets stay relatively stable, with gold rising and the S&P 500 sitting near all-time highs, crypto has sharply moved in the opposite direction, hitting new yearly lows. Everyone is asking the same question: why is crypto still crashing when everything else seems fine?

Below is a detailed look at what is driving the downturn and what could come next.

Bitcoin Falls as Long-Term Holders Start Taking Profit

Bitcoin is trading around $86,135, down 5.93% in the past 24 hours, and analysts say the main selling pressure is coming from long-term holders.

These old wallets still hold most of the supply, and recent on-chain data shows they have started sending coins to exchanges. When long-term holders take profit, the market usually reacts fast because the supply shock is huge.

Analysts also say:

• The market is still sitting on 38% net unrealized profits, meaning many investors are still up even after the drop
  
• The average cost basis of the entire market sits near $56,000, a price Bitcoin may revisit
  
• In past bear markets, Bitcoin even dropped towards the long-term holder realized price, currently around $36,000
  

This has led experts to warn that the current crash may only be the beginning of a deeper correction.

Ethereum Drops Below $2,820 as Hype Fades

Ethereum is down more than 7.36%, trading near $2,816, as the hype around corporate ETH treasury purchases fades. Companies that accumulated ethereum throughout the year have slowed down, and the excitement around ETH-backed products has cooled.

Ethereum ETFs, which were earlier a major bullish narrative, are also seeing lighter flows.

The next strong ETH move may only come after Bitcoin finishes forming its bottom. Michael van de Poppe said that once BTC regains strength, Ethereum could outperform later this month, especially if Bitcoin retests resistance near $92,000.

XRP Falls 8% As Risk-Off Sentiment Spreads

XRP has dropped more than 8.06%, now trading around $2.02, as altcoins take the biggest hit in this correction.

The reason is simple:  When markets go risk-off, the assets that were hyped the most fall the fastest.

Coins like Zcash, which some influencers called “the next Bitcoin,” is down more than 21%. Even strong large-caps like BNB and solana are sliding as investors run toward safer assets.

Technology Stocks Stay Strong, But Crypto Moves the Other Way

One of the most surprising things about this crash is the lack of correlation with traditional markets:

• Gold is rising
  
• Tech stocks (NASDAQ 100) are near all-time highs
  
• S&P 500 is stable
  

Yet crypto is falling sharply. Analysts say this is a warning sign and could be the first signal of a larger risk shift across all markets.

There is also growing concern that the AI boom may be overheating, similar to the dot-com bubble. If tech stocks eventually correct, especially with AI infrastructure being overbuilt — Bitcoin could fall much further because it is still tightly linked to tech-sector risk.

Japan Bond Shock Adds More Pressure

Japan’s 10-year Government Bond Yield jumping to 1.84%, the highest level since 2008, has spooked risk markets globally. Higher yields often pull liquidity out of speculative sectors and crypto is the most speculative sector of all.

Bitcoin Bottom May Take Time

According to Michael van de Poppe, sentiment is still poor, but the market may be close to forming a base.

He says:

• Bitcoin is forming a bottom, but it needs more time
  
• Anything under $90,000 is a major long-term buying opportunity
  
• Once Bitcoin stabilizes, Ethereum may outperform the market