Why Is The Crypto Market Going Down Today?

The crypto market is witnessing a broad-based decline as of June 18, 2025, with major assets such as Bitcoin, Ethereum, Solana, and XRP registering notable losses. This downturn is being driven by a complex mix of geopolitical fears, macroeconomic uncertainty ahead of the U.S. Federal Reserve’s policy decision, and a wave of leveraged liquidations. Despite recent institutional inflows into ETFs, overall sentiment remains fragile, with volatility expected to persist in the near term.

Geopolitical Tensions Spark Risk-Off Sentiment

One of the primary drivers behind today’s selloff is the sharp escalation in Middle East tensions. Israeli airstrikes on Iranian facilities, including the Natanz nuclear site have ignited concerns of a wider conflict involving major global powers. Iran’s retaliatory military posturing, coupled with the possibility of U.S. involvement, has sent investors fleeing risk assets.

Cryptocurrencies, often regarded as high-risk instruments, have not been spared. The total crypto market capitalization has dropped by nearly $140 billion, wiping out approximately 4.2% in value over the past 24 hours. This geopolitical overhang has contributed to sharp corrections across the board, with Bitcoin slipping below $104,000 and Ethereum dropping to around $2,500.

Market analysts note that geopolitical stress events typically lead to a flight to safety, benefiting gold and government bonds while weighing heavily on speculative assets like crypto. The current environment has clearly reaffirmed that dynamic.

Federal Reserve’s FOMC Decision Looms

Adding to the market unease is the impending announcement from the U.S. Federal Reserve regarding interest rates. The Federal Open Market Committee (FOMC) is expected to maintain rates within the 4.25%–4.50% range, but investors are bracing for any forward guidance that might hint at prolonged monetary tightening.

Higher interest rates traditionally weigh on cryptocurrencies by increasing the opportunity cost of holding non-yielding assets. Moreover, tighter liquidity conditions reduce overall market appetite for leverage and speculative investments. The uncertainty ahead of Fed Chair Jerome Powell’s press conference has led to reduced risk-taking and a wait-and-see approach among market participants.

Recent data shows that mid-term Bitcoin holders (those holding assets for 6 to 12 months) have realized over $900 million in profits in the past few sessions, suggesting that caution is replacing confidence.

Liquidations Amplify The Downside

The recent slide in crypto prices has also triggered a wave of forced liquidations in the derivatives market. Over $1 billion in leveraged long positions were wiped out within 24 hours, according to Coinglass data, with Bitcoin futures accounting for more than $434 million of that figure.

BTC price forecast (Source: TradingView)

The breakdown below $106,000 for Bitcoin appears to have activated a series of stop-losses, creating a cascading effect as liquidation algorithms began dumping positions to limit further losses. Ethereum and other altcoins followed suit, intensifying the downside momentum.

Key liquidity clusters between $106,000 and $108,000 failed to hold, and technical analysts now point to $100,000 as the next significant psychological support. If that zone is breached, the market could experience an even sharper pullback, especially if external conditions worsen.

Institutional Flows Remain Resilient

Despite today’s decline, institutional interest remains a notable counterbalance. Bitcoin spot ETFs recorded over $216 million in net inflows, and total ETF inflows since June 16 have surpassed $412 million. Ethereum-based ETFs have also seen modest inflows of $11 million, indicating that long-term investors are treating the current dip as a potential buying opportunity.

The juxtaposition of short-term volatility and long-term capital inflows illustrates the ongoing tug-of-war between retail sentiment and institutional conviction. While leveraged traders are getting flushed out, asset managers and macro investors appear to be slowly building positions on weakness.

Altcoins Struggle, DeFi Shows Pockets Of Strength

Across the altcoin landscape, major tokens are firmly in the red. Solana is down by nearly 3.5%, XRP has fallen 3.6%, and Dogecoin has slipped 2.5% on the day. These declines reflect the broader de-risking move across crypto sectors.

Interestingly, certain DeFi tokens such as Aave and Uniswap have seen a 20% bump over the past week, driven by optimistic regulatory developments in the United States. 

The U.S. Senate has passed the GENIUS Act — landmark stablecoin legislation that provides regulatory clarity, enhances consumer protection, and extends U.S. dollar dominance online. Thanks to President Trump for his leadership on crypto & @SenatorHagerty for authoring the bill.

— David Sacks (@davidsacks47) June 17, 2025

The Senate recently passed the GENIUS Act, aiming to bring more clarity to stablecoin governance and DeFi compliance standards. Although this positive momentum hasn’t been enough to lift the broader market, it does highlight the potential for selective resilience within the crypto ecosystem.

Outlook: Volatility Likely To Persist

Looking ahead, the market’s short-term trajectory will hinge heavily on two critical factors: the tone of the Federal Reserve’s guidance and the evolution of the Israel–Iran conflict. Any signal of dovishness from the Fed or signs of de-escalation in the Middle East could trigger a relief rally. Conversely, sustained uncertainty or hawkish rhetoric would likely maintain downside pressure.

From a technical standpoint, Bitcoin must reclaim the $106,000–$108,000 range to stabilize. A failure to hold the $100,000 support level could invite deeper corrections toward $96,000 or lower. Ethereum faces similar thresholds, with resistance near $2,600 and critical support hovering around $2,400.

While the current selloff is unnerving, it is not necessarily the beginning of a prolonged bear cycle. Institutional flows remain constructive, and long-term narratives around tokenization, decentralized finance, and Web3 infrastructure continue to gain ground. For now, though, caution remains the prevailing sentiment.