TLDR:
- Market: On July 29, 2025, the crypto market reversed its brief rebound, with declines of 2-6% across major sectors. The AI sector saw the steepest drop at 6.75%, followed by Meme (5.98%), RWA (5.80%), Layer2 (5.41%), and DeFi (5.20%). Ethereum ($ETH) fell 2.17% below $3,800, and Bitcoin ($BTC) dipped 0.99% to $117,000.
- Narrative: The crypto market correction was a profit-taking after a rowdy July, and with AI section was beaten the worst by overbought conditions. Even with sell-down, selective altcoins and structural considerations, such as ETF inflow, suggest room to bounce back should major support levels hold.
The cryptocurrency market experienced a sharp pullback on July 29, 2025, erasing gains from a short-lived rebound, with declines ranging from 2% to 6% across major sectors, according to SoSoValue. The AI sector led the losses, dropping 6.75% in 24 hours, with Virtuals Protocol (VIRTUAL) plummeting 15.01%, Worldcoin (WLD) falling 7.99%, and ai16z (AI16Z) declining 9.89%. Ethereum ($ETH) slid 2.17%, dipping below the critical $3,800 mark, while Bitcoin ($BTC) saw a milder 0.99% drop, settling at $117,000. The correction follows a $160 billion market selloff, driven by ETF outflows and profit-taking, with Galaxy Digital’s transfer of 10,000 BTC ($1.18 billion) and $370 million in USDT adding selling pressure.
Other sectors also faced significant declines. The CeFi sector dropped 1.87%, with Binance Coin ($BNB) down 2.52%. The Layer1 sector fell 3.20%, led by Cardano (ADA) at 5.30% and Sui (SUI) at 8.88%. The PayFi sector declined 3.88%, with Stellar (XLM) and Telcoin (TEL) losing 6.57% and 8.74%, respectively. The DeFi sector saw a 5.20% drop, driven by PancakeSwap (CAKE) and Jupiter (JUP) falling 10.34% and 12.06%. The Layer2 sector declined 5.41%, with Celestia (TIA) and Stacks (STX) down 8.85% and 9.45%. The RWA sector dropped 5.80%, though Keeta (KTA) gained 8.45%. The Meme sector fell 5.98%, with Pump.fun ($PUMP) and Mog Coin (MOG) down 12.13% and 13.09%, and $Fartcoin ($FARTCOIN) plunging 16.87%. Crypto sector indices reflected similar losses, with ssiAI down 7.22%, ssiGameFi down 6.15%, and ssiDePIN down 5.89%.
Despite the downturn, structural factors suggest resilience. Bitcoin’s consolidation above $115,000, supported by its 20-day EMA, maintains a bullish structure, though a bearish MACD crossover hints at short-term consolidation. Ethereum’s drop below $3,800 aligns with a record 680,000 ETH in its validator exit queue, signaling profit-taking after a 25.6% weekly gain driven by ETF inflows and staking activity. The Altcoin Season Index at 39/100 indicates Bitcoin dominance but hints at rotation into altcoins, with selective opportunities in DeFi and Layer1 tokens like Solana, which surged past $200 recently., Institutional inflows, including BlackRock’s Ethereum ETF reaching $10 billion in assets, and regulatory advancements like the GENIUS Act for stablecoins, bolster long-term optimism.
The market’s pullback reflects a cooling of overbought conditions, particularly in the AI sector, which had seen speculative fervor. However, the broader uptrend remains intact, with the total crypto market cap at $3.73 trillion, supported by rising volume and ETF-driven inflows. If Bitcoin holds above $115,000 and Ethereum stabilizes near $3,600, the market could see renewed momentum, especially with upcoming events like the FOMC meeting and Bitwise BITW ETF decision.
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