Ethereum, XRP, Dogecoin, and Bitcoin collectively lost $1 trillion in cryptocurrency value after Bitcoin fell below key support.
Massive leveraged trades and forced liquidations accelerated the market crash across major cryptocurrencies.
Despite strong fundamentals, Ethereum, XRP, and Dogecoin faced heavy selling due to panic and risk-off sentiment.
Massive changes are happening in the cryptocurrency market, with an estimated $1 trillion of market value erased in a short time. Leading tokens such as Ethereum (ETH), XRP, and Dogecoin (DOGE) have been swept into the downdraft, and the reasons go well beyond any one coin’s fundamentals.
The trouble began when Bitcoin (BTC) slipped below the key psychological level of $100,000 for the first time since June 2025. This threshold had been viewed as a kind of support, and its breach triggered alarm in many quarters.
According to a report, the total crypto market capitalisation had fallen by more than $1 trillion at that moment. Analysts described the event as the market entering bear territory, given the roughly 20% decline in Bitcoin from its recent peak.
In this context, ETH, XRP, and DOGE were caught in the spill-over: with Bitcoin’s slide priming the market for a broader de-risking move, large positions in the major altcoins were also unwound.
A key structural reason for the sharp drop lies in leverage and derivatives positions. In many crypto platforms, traders hold large long bets in futures and perpetual contracts. When prices turn, forced liquidations can cascade. For example, on one of the heavy fall days, ETH liquidations alone were estimated at $377 million, with thousands of positions getting closed at a loss.
Because ETH and other large tokens had attracted heavy derivatives interest, they were particularly vulnerable when the market shifted. When Bitcoin’s breakdown weakened general sentiment, this allowed forced selling and liquidation cascades to pull altcoins down faster than usual.
Ethereum, as the second‐largest coin and the backbone of much of the smart-contract ecosystem, tends to follow market structure more than short-term adoption. Even though the network’s fundamentals remained strong (of which more later), the fact that many ETH holders were long and leveraged made it vulnerable in this kind of broad de-risking event.
XRP had been riding a wave of positive regulatory developments, which in calmer markets might have provided more resilience. However, the broader sell-off erased much of the advantage: market participants retreating from risk don’t always distinguish much between coins. For XRP, strong positioning meant it was vulnerable when the mood shifted.
Dogecoin, often considered a “high‐beta” asset, amplifies market sentiment. When risk-appetite rises, it may soar; when risk-appetite falls, it may tumble faster. Because many traders treat it as a speculative play rather than a core value asset, it tends to suffer when markets reset.
At the moment of the drop, Bitcoin fell through its threshold, and altcoins mirrored the move. Reports suggest that during the wipe-out, ETH and other majors lost most of their yearly gains. XRP fell by around 7% in one move to around $2.17, while Dogecoin dropped approximately 7% to around $0.157. Other reports have ETH trading near $3,220, XRP around $2.16, and DOGE near $0.161 as the market tries to stabilize.
These levels underline how much volatility remains: even though some bounce was seen, the high‐leverage environment and overheated positioning earlier meant there was little cushion for error.
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Beyond leverage, a shift in broader market sentiment played a major role. A rising sense of risk-off in equities, global macro, inflation, and interest-rate expectations has toxically affected high‐volatility assets like crypto. When macro tailwinds fade, crypto tends to move more in line with other risk markets rather than diverge.
Profit-taking after a long bull run also contributed. Many investors who had participated earlier chose to lock in gains when signals turned worrisome. As crypto had enjoyed strong advances, the exit of even moderate volumes became magnified in price terms.
In the case of Ethereum, the network’s fundamentals remain robust. Significant upgrades aimed at scaling, such as proposals for data compression and other Layer-2 developments, are in motion. Roll-ups and network usage remain elevated, indicating the ecosystem is growing even as prices drop. Thus, the weakness in ETH is far more about market structure and investor behaviour than lack of fundamental utility.
This disconnect between strong fundamentals and weak price is common in phases of de-risking: asset health might be fine, but the market mood rules. Until leverage resets and sentiment stabilises, even the best projects can drift lower.
One stabiliser is a reset in leverage: as forced liquidations finish and funding rates normalise, the market may find a floor. Derivatives desks and clearing mechanisms will prefer calmer conditions, which can halt the cascade of exits.
Another positive would be renewed inflows into spot markets, especially if institutional investors resume allocations rather than purely trading flows. That may reduce the dominance of short-term speculative exits.
Thirdly, improved clarity in the macro environment, such as consistent economic data, stable interest-rate signals, or reduced geopolitical shocks, could reopen risk appetite. Once investors feel the broader floor is set, altcoins can regain idiosyncratic upside rather than staying hostage to Bitcoin movements.
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The recent wipe of about $1 trillion from the crypto market is less a reflection of underlying project failure and more a story of market mechanics: leverage, positioning, risk-off sentiment, and profit‐taking. The major assets, Ethereum, XRP, and Dogecoin, were dragged into the valley not because their protocols failed overnight, but because the broader market mood changed rapidly.
For those watching these coins, the key will be how quickly leverage is reduced, funding rates align, and investor confidence returns. Until those structural conditions reset, volatility remains elevated, and the path back upward may be gradual rather than abrupt.