Crypto Market Drops: ETH Down 4.7%, SOL 6%, AVAX 7.5%

The crypto market had a rough start to the week. Bitcoin briefly shot past $107,000 on Sunday, but it didn’t last long. Prices quickly reversed, with most of the major altcoins like Solana and Ethereum facing declines.

According to CoinGlass, over $650 million in liquidations occurred in the past 24 hours, underscoring the scale of volatility. Bitcoin has since dropped back to around $103,000, down 0.8% for the day, but the broader market remains under pressure. The total crypto market cap declined 1.75% to $3.25 trillion, even as 24-hour trading volume jumped 76% to $150 billion.

Bitcoin Rally Triggers Profit-Taking Across Altcoins

Bitcoin’s surge above $107,000 marked a key technical level, but for many traders, it was also a cue to lock in gains. Rapid weekend rallies, especially in low-liquidity conditions, often lead to quick pullbacks, and that’s exactly what followed.

As Bitcoin began to slide, selling pressure spread across the market. Investors shifted to reduce risk, starting with more volatile altcoins. This led to sharp losses across major tokens:

• Avalanche (AVAX): -7.5%
• Solana (SOL): -6.1%
• Cardano (ADA): -5.6%
• Shiba Inu (SHIB): -5.5%
• Ethereum (ETH): -4.7%
• XRP (XRP): -4.0%

The recent declines follow a common pattern in crypto markets. Rapid surges in Bitcoin often attract attention but also signal caution. Altcoins, especially those with lower liquidity and greater leverage exposure, tend to experience sharper losses in the aftermath.

In such sentiment-driven environments, psychological price levels carry significant weight. While new all-time highs can draw in fresh speculation, they frequently prompt profit-taking from both short- and long-term investors.

Market Prepares for Inflation Data and ETF Slowdown

Beyond price changes and liquidation numbers, there is growing uncertainty due to broader economic factors. This week, the focus is on the upcoming U.S. inflation report, which will guide the Federal Reserve’s next moves. Traders are cautious, reluctant to take significant positions without clearer signals on whether rates will be cut, maintained, or increased.

Elevated inflation typically weighs on risk assets, including cryptocurrencies. Rate hikes—or even their anticipation—tend to reduce liquidity in speculative markets. As a result, traders are adopting a cautious approach while awaiting greater clarity.

Adding to this caution is a sharp slowdown in spot Bitcoin ETF inflows. After a $334 million inflow on May 9, the amount dropped to just $5.10 million by May 12. This big drop shows that institutional investors are holding back. This matters because much of Bitcoin’s recent strength came from fresh institutional interest. Without it, momentum fades fast.

Coinbase Security Breach Shakes Confidence

Adding to the pressure, confidence in the ecosystem took a hit after Coinbase confirmed a significant security breach. According to reports, scammers managed to bribe third-party customer service agents and access sensitive user data. The estimated financial impact could be as high as $400 million.

While the breach didn’t directly affect crypto prices, it contributed to the risk-off sentiment. In an environment already rattled by macro uncertainty and high leverage, any dent in trust, even if isolated, can have ripple effects. The fact that this incident involved one of the most regulated and publicly visible exchanges in the U.S. only amplifies concerns.

This development also rekindles ongoing debates around centralized platforms and third-party vulnerabilities. As the industry continues to mature, these risks will likely remain front and center for regulators and institutions alike.

What Comes Next?

The past 48 hours have highlighted how quickly momentum can shift in the crypto market. What started as a record-breaking Sunday ended with broad losses across most major tokens. While Bitcoin’s new all-time high remains an important technical achievement, it did not spark the strong rally many anticipated.

Instead, a mix of profit-taking, economic uncertainty, slower ETF inflows, and a security breach caused altcoins to drop. Still, the long-term outlook hasn’t changed much. Institutional interest is still there, but more cautious, and the market’s infrastructure keeps growing. However, in the short term, traders should prepare for continued volatility.