Major altcoins led by Ethereum (CRYPTO: ETH) and Ripple‘s XRP (CRYPTO: XRP) posted sharp declines on Thursday, reversing gains from a strong rally earlier this month.
What Happened: The broader cryptocurrency market experienced a notable selloff, with experts pointing to both overheated momentum and emerging signs of a corrective phase, even as structural fundamentals continue to strengthen.
According to data, Ethereum dropped 2%, while XRP fell by over 10%, leading losses among large-cap tokens.
Other altcoins including BNB (CRYPTO: BNB), Solana (CRYPTO: SOL), Cardano (CRYPTO: ADA), Dogecoin (CRYPTO: DOGE), and Tron (CRYPTO: TRON) also registered losses exceeding 4%.
Bitcoin (CRYPTO: BTC), in contrast, edged slightly higher, gaining 0.26% and maintaining relative stability during the downturn.
What Experts Are Saying: In a note sent to Benzinga, James Harris, CEO of institutional crypto firm Tesseract, said the market’s recent surge to a $4 trillion total market cap was driven by a “powerful trifecta” of supportive forces, but he cautioned that these tailwinds come with their own risks.
“The rally has been underpinned by structural regulatory wins, improving macro conditions, and growing corporate treasury involvement,” Harris explained.
He noted that new U.S. legislation such as the GENIUS Act and progress on the CLARITY bill have triggered a sharp turnaround in institutional sentiment.
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“Bitcoin jumped 10–15% after the legislation moved forward, and altcoins like ETH outpaced that,” he said.
Harris also cited improving inflation data and expectations for interest rate cuts as key macroeconomic drivers behind the current risk-on sentiment.
“As central banks around the world begin to shift toward easing, capital is flowing into assets like crypto that sit higher on the risk curve,” he said.
Beyond the macro and regulatory backdrop, Harris pointed to a growing trend of public companies treating digital assets as treasury reserves.
“Strategy (NASDAQ:MSTR) added over 20,000 BTC this year alone, and others are following,” he noted. “We’re seeing listed firms buying ETH, SOL, and even making those moves public — a self-reinforcing loop.”
However, that same bullish setup could quickly unravel, Harris warned. “While momentum is strong, these forces can reverse quickly. Disciplined risk management remains essential.”
Alex Kuptsikevich, Chief Market Analyst at FxPro, offered a more near-term technical outlook.
“Altcoins, which had been fueling the rally, have sold off aggressively. Nearly half of the top 100 altcoins are posting double-digit losses,” he said.
He also observed a narrowing range in Bitcoin’s price movement:
“BTC’s stability is critical. If it drops to $111,000, it would complete a textbook corrective pattern,” Kuptsikevich added, warning that continued weakness could intensify bearish sentiment across the entire crypto market.
Despite recent ETF outflows in Bitcoin, Kuptsikevich noted that Ethereum continues to attract fresh capital into funds, highlighting diverging investor sentiment between the two largest assets.
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