Crypto market declined 2% alongside tech selloff, with Bitcoin down 2.28% and Ethereum down 0.65%, tracking Nasdaq weakness.
Macro & Markets ·
Crypto markets moved lower alongside equity weakness during the week ending July 27, with Bitcoin falling 2.28% and Ethereum declining 0.65%, tracking a broader tech selloff that saw the Nasdaq drop 2.26% and the S&P 500 fall 0.40%. The total crypto market cap contracted 2.04%, breaking Bitcoin's four-week streak of gains. This synchronized movement reflects tighter correlation between digital assets and equities during periods of risk aversion.
Underlying the decline were signs of capitulation and changing sentiment. Liquidations surged 166% to $662 million on July 27, the highest since June 25, while Bitcoin ETFs experienced $477 million in outflows over the five-day span after a seven-day inflow run. Trading positioning shifted to 51.46% short-tilted from long bias, and open interest contracted 3.44%. Additionally, Polymarket pricing on a Federal Reserve rate hold compressed from 93% a week prior to 72% as of late July, suggesting growing uncertainty ahead of the Fed's mid-week decision.
The compression of historical volatility patterns remains notable: Bitcoin's typical outperformance during risk-off moves narrowed to roughly equal losses with equities this week. The VIX held near 18.6, and implied volatility metrics stayed in the bottom quartile of their annual range, indicating subdued derivative pricing despite the directional weakness in spot markets.