**Crypto Market Takes a Hit: What's Driving the Downturn?**

The cryptocurrency market saw a significant drop on July 25, with total market capitalization falling over 3.5% to around $2.31 trillion. This decline mirrors the recent weakness in US equities, where the stock market lost $1.1 trillion in valuation in just 24 hours. The S&P 500 and Nasdaq hit multi-week lows, with the S&P 500 breaking its growth streak with a 2% decline.

Adding to the pressure, the US Dollar Index fell another 0.3%, and US Initial Jobless Claims rose by 235,000 for the week ending July 20. Investors are now cautious about the Federal Reserve's monetary policy, with low expectations for rate cuts in July but higher odds for cuts later in the year.

Spot Ethereum ETFs also faced outflows, logging a net outflow of $133.3 million, while Grayscale Ethereum Trust saw $326.9 million in outflows. This sell-off trend is reminiscent of previous crypto ETF launches, leading to a lack of confidence in sustained growth.

In the derivatives market, long liquidations reached $301.17 million, adding to the selling pressure and driving the market lower. With mixed sentiment and seasonal weakness, the crypto market remains volatile.