Crypto Market Rebounds Amid Risk-Off Sentiment, $2.6 Billion in Liquidations Triggered

Bitcoin, Ethereum, and XRP rebounded amid a broader risk-off mood in the crypto market, though the recovery remains fragile as traders continue to assess macroeconomic conditions according to market analysis. The price of Bitcoin held above $70,000 after hitting a low of $69,922, while Ethereum tested key support levels, and XRP slipped below $1.40 before stabilizing as reported. Despite the rebound, market participants remain cautious, with open interest in futures contracts shrinking for major assets according to data.

Retail investor activity has been a significant factor in the ongoing downturn, as open interest for Bitcoin futures fell to $48.53 billion from $50.5 billion the previous day, signaling a loss of liquidity and potential for further price weakness according to analysis. Similar trends were observed in Ethereum and XRP, with open interest dropping to $25.6 billion and $2.57 billion, respectively as reported. This decline in open interest reflects a bearish sentiment, where traders are closing positions rather than opening new ones according to market data.

XRP ETFs, however, showed some signs of resilience, with a two-day inflow streak of nearly $5 million as investors continue to allocate capital to the asset as noted. Despite this, on-chain metrics remain weak, with active addresses on the XRP Ledger falling to around 18,000 and derivatives positioning showing no clear signs of recovery according to analysis.

Why the Move Happened

The recent decline in crypto prices has been driven by a mix of macroeconomic headwinds and reduced retail participation. Bitcoin, Ethereum, and XRP have all seen open interest shrink significantly over the past month, indicating that traders are pulling back from leveraged positions according to market data. This decline in liquidity has made it more difficult for prices to stabilize, particularly during periods of heightened volatility as reported.

The broader macroeconomic environment has also played a role, with rising real yields and tightening monetary policy from the Federal Reserve weighing on high-beta assets like cryptocurrencies according to analysis. The market has priced in fewer rate cuts for 2026 than previously expected, reducing the amount of speculative capital available for risky assets according to analysis.

Retail investors have also contributed to the weakness, with Bitcoin futures open interest falling below $50 billion for the first time in months according to data. This reduction in open interest suggests that leveraged traders are exiting positions, adding further downward pressure on prices according to market analysis.

How Markets Responded

The decline in open interest has led to increased volatility in the crypto markets, with Bitcoin and Ethereum experiencing sharp intraday swings as liquidations triggered additional selling according to reports. Over the past 24 hours, approximately $2.6 billion in leveraged positions were liquidated, with the majority of the losses concentrated in long positions according to analysis.

Ethereum's derivatives market has also shown signs of weakness, with open interest falling to $25.6 billion from $26.3 billion the previous day according to data. This continued outflow of capital has made it difficult for ETH to sustain any meaningful rebound, with the token struggling to hold above $2,000 as reported.

XRP has been particularly hard hit, with the token falling below $1.40 after a sharp decline over the past week according to market data. Despite a brief recovery to $1.62, the token remains under pressure as bearish technical indicators remain intact according to analysis.

What Analysts Are Watching

Analysts are closely monitoring key technical levels for Bitcoin, Ethereum, and XRP as the market remains in a fragile state. Bitcoin is currently testing the $70,000 level, with a breakdown below this threshold potentially triggering further declines toward $65,260 according to technical analysis. Ethereum faces similar challenges, with support levels near $2,000 and $1,800 being closely watched according to market data.

XRP's technical outlook remains bearish, with the token struggling to break above key resistance levels according to analysis. Analysts suggest that a daily close below $1.60 could accelerate the decline toward $1.50, with further weakness expected if the $1.50 level fails according to technical indicators.

Derivatives and ETF flows will also be important to watch in the coming weeks, as any sustained inflow could provide a much-needed boost to prices according to analysis. At the moment, however, the market remains in a cautious state, with traders favoring risk-off strategies over aggressive accumulation according to market data.

Institutional demand for XRP has shown some resilience, with Bank of America recently purchasing shares in an XRP ETF as reported. This move highlights growing institutional interest in the asset, though it remains to be seen whether this will translate into sustained price action according to market analysis.

Overall, the market remains in a state of flux, with short-term bearish momentum continuing to dominate. While there are signs of potential support in key levels, the broader macroeconomic environment and declining open interest suggest that further volatility is likely in the near term according to analysis.