Unpacking Today’s Crypto Slump: Key Factors Behind the Downturn

Crypto markets tumble as regulatory pressures mount and investor sentiment sours.

Market Mechanics Under Stress

Trading volumes shrink while leverage positions unravel across major exchanges. Liquidity crunches hit altcoins hardest as risk appetite evaporates.

The Institutional Chill

Traditional finance players pull back exposure despite earlier bullish predictions. Another case of Wall Street's 'risk-on, risk-off' whiplash striking digital assets.

Technical Breakdown

Critical support levels shattered as sell orders cluster around psychological price points. The domino effect triggers stop-loss cascades through derivative markets.

Yet beneath the red candles, blockchain activity continues unabated—proving once again that price movements and network utility remain frustratingly disconnected in this nascent asset class.

TLDR

• Bitcoin dropped below $106,000 as the total crypto market cap fell over 4% in 24 hours, with altcoins and meme coins hit hardest
• Federal Reserve Chair Jerome Powell signaled future rate cuts are not guaranteed, strengthening the U.S. dollar and pressuring crypto prices
• U.S. spot Bitcoin ETF outflows show institutions taking profits, triggering technical selling when Bitcoin lost support at $110,000 and $106,000
• Liquidations surged 686% to $1.29 billion in 24 hours, affecting over 334,000 traders as leveraged positions were wiped out
• The Crypto Fear and Greed Index dropped to 35, with critical Bitcoin support at $100,000-$101,000 now in focus

The cryptocurrency market lost $156 billion in 24 hours as Bitcoin slipped below $108,000. The total crypto market capitalization now stands at $3.52 trillion after the sharp decline.

Bitcoin currently trades at $107,090 after losing the $108,000 support level. The crypto is holding above the $105,585 support zone for now.

Most altcoins posted losses during the selloff. Aster fell 24% in a single day. Dogecoin dropped 45% from its September highs.

Ethereum, Solana, BNB, and XRP all recorded steep declines. The broader market correction affected both large-cap and smaller tokens.

Fed Signals Dampen Rate Cut Hopes

Federal Reserve Chair Jerome Powell made comments that reduced expectations for future rate cuts. The Fed implemented a 25 basis-point rate cut in October.

Powell stated that additional rate cuts are not guaranteed going forward. This hawkish stance strengthened the U.S. dollar.

JUST IN: 🇺🇸 Fed Chair Jerome Powell says December interest rate cut is "far" from certain. pic.twitter.com/IbTs0sVriM

— Watcher.Guru (@WatcherGuru) October 29, 2025

Federal Reserve Governor Austan Goolsbee’s comments further dampened market sentiment. The odds of a December rate cut fell from 69.8% to 67.5%.

The shift in monetary policy expectations pushed traders away from risk assets. Cryptocurrencies faced increased selling pressure as investors adopted defensive positions.

Institutional investors have been taking profits at recent price levels. U.S. spot Bitcoin ETF outflows show large-scale profit-taking activity.

Bitcoin lost crucial support at $110,000 first. The breakdown triggered technical selling across the market.

When bitcoin fell below $106,000, the selling accelerated. Popular tokens including Dogecoin, Shiba Inu, and Pepe followed Bitcoin lower.

Mass Liquidations Hit Leveraged Traders

The rapid price decline triggered forced liquidations across exchanges. Over 334,000 traders were affected in the past 24 hours.

Total liquidations reached $1.29 billion, representing a 686% increase. Highly Leveraged positions were wiped out as prices fell.

The liquidation cascade deepened losses for altcoins and meme coins. Smaller tokens experienced double-digit percentage drops.

The Crypto Fear and Greed Index sank to 21, indicating high investor fear. Market sentiment has turned cautious amid the volatility.

Analysts identify critical support between $100,000 and $101,000 for Bitcoin. A break below this range could trigger additional downside.

If Bitcoin holds current support levels, a recovery could begin. A sustained move above $108,000 WOULD improve sentiment.

Reclaiming $110,000 as support would restore investor confidence. Such a MOVE could push Bitcoin toward $112,500.

The total crypto market cap could fall to $3.43 trillion if weakness continues. This would extend the current correction phase.

If demand rebounds, the market cap could recover above $3.56 trillion. A move higher may lead to a test of $3.67 trillion resistance.