Key Insights
- The crypto market is down today because of whales and retail traders’ profit-taking.
- Despite the drop, trader sentiment is still bullish and shows signs of a possible recovery soon.
- Altcoin season may be approaching, but Bitcoin dominance is still high.
Major cryptocurrencies like Bitcoin, Ethereum, XRP, and Solana have been under pressure lately amid a general market correction. After Bitcoin’s all-time high last week, the top 100 crypto assets have entered a consolidation phase.
It wiped nearly 6% off the market cap in 24 hours. This correction has pushed the overall market cap below $4 trillion. The dip has been a significant concern. However, some analysts consider it a necessary breather after a strong rally.
Bitcoin, Ethereum, XRP, and Solana Lead Market Correction
Recently, Bitcoin dropped below the $120,000 support level and trades around $118,000. Ethereum and XRP also fell through some of their most crucial price supports. On the other hand, Solana suffered one of the sharpest pullbacks among the top ten coins.
This price dip was most likely caused by profit-taking behavior among investors. Santiment shows that retail traders and whales have been cashing in on asset gains over the past few months. This wave of selling has put a great deal of downward pressure on token prices across the board..
Whales and Retail Traders Are Taking Profits
Since May 2025, profit-taking has increased strongly for Bitcoin, Ethereum, and XRP. Network Realized Profit/Loss (NPL) data shows large spikes, indicating a pattern where whales unload their holdings at recent highs.
These actions from such large players can do much to increase selling pressure and worsen already strong market corrections.
This selling behavior isn’t necessarily bearish. It’s a typical response during overbought conditions. It can even signal many investors to lock in profits before volatility.
Altcoin Season May Be Around the Corner
The Altcoin Season Index from CoinMarketCap showed the market was in a neutral phase on Wednesday. This coincided with a market dip during the same time.
However, the index currently stands at 39, far below the 75 threshold that marks the beginning of an altcoin season. Six months ago, in December last year, the index was above 75, indicating that altcoins outperformed Bitcoin.
Since then, Bitcoin’s dominance has remained strong despite ups and downs. Also, the institutional investors have shifted their focus back towards BTC.
Altcoins like Ethereum, XRP, and Solana maintain a correlation coefficient above 0.75 with Bitcoin. This means that any correction (or price rise) in BTC also tends to drag them down.
Market Sentiment Remains Bullish Despite the Dip
Interestingly, the Crypto Fear & Greed Index remains in the “Greed” zone. This shows that retail sentiment hasn’t soured despite the correction. Traders still have their hopes up and see the dip as an opportunity, rather than a reason to panic.
This sentiment is usually seen during strong bull markets, where short-term corrections are accepted as healthy pauses. Many traders expect Bitcoin, Ethereum, XRP, and Solana to test their previous highs once the market stabilizes.
Is This Just a Healthy Pullback?
Analysts are calling this correction a “healthy reset”. This is because the market had overheated after the Trump-driven rally, and technical indicators flashed overbought signals for many assets.
Ethereum, for example, is now showing signs of slower selling pressure. Also, XRP has formed a bullish “Golden Cross” on its daily chart. Both are strong signals that a recovery could be on the horizon.
Some altcoins, including Hedera and Hyperliquid, have seen similar drops. This happened after falling over 5% in the past 24 hours, according to CoinGecko. This underperformance is common during market rotations, especially before a new altcoin season starts.
