The global cryptocurrency market is experiencing a temporary downturn, with total market capitalization slipping 1.23% to $3.66 trillion over the past 24 hours. Leading this correction, Bitcoin has fallen below the critical $114,000 threshold and is now trading around $113,715.

Overbought Conditions Spark Cooldown

Several major cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), had recently entered overbought zones, aligning with similar trends seen in traditional equity markets like the S&P 500 and Nasdaq. RSI has now dropped to around 40, suggesting a needed pause after a sustained rally.

Altcoins have taken a sharper hit. Ethereum is down over 2.7%, trading near $3,434. XRP leads the losses with a steep 6.7% drop, followed by BNB which fell 2.97%. Other notable declines include SOL at -2.42%, ADA at -1.12%, DOGE at -3.39%, and SUI down -3.41%.

Despite the dip, analysts interpret this as a healthy market correction rather than a signal of long-term weakness. The “Total 3” index which excludes BTC, ETH, and stablecoins had become overheated in recent weeks, and the current pullback is seen as a necessary reset.

Key Support Zones and Bullish Underpinnings

Bitcoin's strong support levels between $110,000 and $106,000 remain intact. Many traders expect a potential rebound from these levels later this month.

Meanwhile, institutional interest in crypto remains strong. July saw record inflows of $12.8 billion into U.S. based crypto ETFs, with both Bitcoin and Ethereum benefiting significantly. On-chain data further shows a rise in wallets holding 10 or more BTC a sign that long-term investors are continuing to accumulate.

Macroeconomic Factors in Focus

The market is also reacting to macroeconomic signals. Recent U.S. job data came in weaker than expected, raising the likelihood of a Federal Reserve rate cut in September. According to the CME FedWatch tool, the probability of a rate cut has surged to 81.9%, up from 37% earlier.

Adding to the optimism, delays in proposed U.S.China tariffs and regulatory discussions such as the Market Structure Bill are creating expectations of increased market liquidity and a more favorable environment for crypto growth in the near future.

Quick Market Snapshot:

BBTC: $113,715 -1.4%

ETH: $3,434 (-2.7%)

XRP: 6.7%

BNB: 2.97%

SOL: 2.42%

ADA: 1.12%

DOGE: 3.39%

SUI: 3.41%

While today’s dip may seem discouraging to some, seasoned investors view it as a constructive pullback within a broader bullish trend. With strong fundamentals, increasing institutional inflows, and favorable macroeconomic developments, the market could soon regain upward momentum.