The crypto market is down 2% as of July 1, 2025, due to several factors including liquidations and political instability in the U.S.
Bitcoin Liquidation Hits $5.21M
Bitcoin, as the leading asset, is driving the decline, trading at $106,025, representing a decrease of 1.58% in the last 24 hours. The main source of liquidations comes from leveraged traders, according to Coinglass data. Consequently, massive sell-offs occurred due to liquidated positions.
* BTC Long Liquidations: $5.08 million * BTC Short Liquidations: Just $128K
This liquidation map reveals that bulls were heavily over-leveraged, and when the price dropped suddenly, their positions were auto-liquidated, fueling a cascading sell-off.
Political Uncertainty in the U.S.
Political activity in the U.S. is also generating an atmosphere of uncertainty. The Senate is preparing to vote on Trump's controversial $4.5 trillion bill that includes significant tax cuts and military funding, but will also increase the national debt by over $3 trillion.
In response, Elon Musk blasted the bill and warned that every Congressman who supported it would be unseated. This political conflict creates additional uncertainty in the cryptocurrency market, causing investors to be cautious.
Impact of Backed Finance Founders on Web3 Trust
Particular concern in the market arises from the founders of Backed Finance, the team behind the tokenized stock platform xStocks. All three founders were previously involved in DAOstack, a project that raised $30 million but collapsed in 2022. Given that xStocks deals in blockchain-based Real World Assets (RWAs), this past connection raises fears about potential mismanagement. This news undermines confidence in the RWA and DeFi sectors, adding a new reason for today's crash.
Thus, there are multiple factors contributing to the drop in the crypto market today: liquidation of positions, political and public uncertainty, and distrust in new tokenization projects. Nevertheless, high trading volume and a greed sentiment index at 64 indicate a potential market recovery soon.
