TLDR
- Crypto market cap fell $150 billion to $3.70 trillion in 24 hours following widespread liquidations
- Bitcoin dropped to $109,357 after breaking below $110,000 support level
- US government shutdown fears and Fed Chair Powell’s inflation warnings drove selloff
- Over $1 billion in crypto liquidations occurred as institutional investors withdrew funds
- Ethereum fell below $4,000 while altcoins saw double-digit declines
The cryptocurrency market experienced a sharp downturn on September 26, 2025, with total market capitalization falling $150 billion to $3.70 trillion. Bitcoin led the decline, dropping from $113,200 to $109,357 within 24 hours.
The selloff was driven by multiple factors including macroeconomic uncertainty and rising fears of a potential US government shutdown. Federal Reserve Chair Jerome Powell’s recent warnings about persistent inflation risks and deteriorating labor market conditions added to investor concerns.
Over $1 billion in cryptocurrency liquidations swept across digital asset exchanges. This massive deleveraging event triggered automatic selling programs and forced closure of leveraged positions across Bitcoin, Ethereum, and altcoin markets.
Institutional investors accelerated their capital withdrawal from crypto markets this week. Major trading firms and investment funds reduced their digital asset exposure as uncertainty around Federal Reserve policy and government funding created risk-off sentiment.
Government Shutdown Concerns Drive Risk-Off Sentiment
Growing anxiety about a potential US government shutdown has created widespread uncertainty in financial markets. Congressional leaders face pressure to pass funding legislation before the September 30 deadline to prevent federal operations from halting.
The crypto Fear & Greed Index remained in “Fear” territory, reflecting cautious market sentiment among traders and investors. This psychological indicator often amplifies price swings during periods of market stress.
Bitcoin’s fall below the critical $110,000 level has technical analysts watching the $108,000 support zone. A break of this level could trigger additional selling and test lower support levels around $105,000.
Ethereum traded between $3,900 and $3,950, falling below the psychologically important $4,000 threshold. Options expiries worth billions of dollars this week have added to selling pressure across major cryptocurrencies.
Altcoins Face Accelerated Declines
Solana declined 21% over the week as part of the broader risk-off rotation affecting smaller-cap digital assets. Dogecoin fell to $0.23, down 3-5% as meme coin trading volumes decreased during the market stress.
Trading activity increased across major exchanges as automated selling programs activated following breaches of key technical support levels. Market makers widened bid-ask spreads to account for increased volatility and reduced liquidity.
The total crypto market cap currently holds above the $3.67 trillion support level. Technical analysts warn that failure to maintain this level could lead to further declines toward $3.58 trillion.
Recovery prospects depend on Bitcoin reclaiming $110,000 as support and broader financial markets stabilizing. Market participants are monitoring economic data releases and Federal Reserve communications for signs of policy direction changes that could affect risk asset demand.
