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Cardano (ADA) and Ripple’s native token (XRP) led losses among major cryptocurrencies as Bitcoin’s (BTC) correction dragged the broader market lower.

The overall crypto market capitalization dropped 1.6% in the last 24 hours, slipping to $3.91 trillion. Bitcoin’s price was trading at around $113,700, with retail sentiment on Stocktwits in ‘bearish’ territory. According to a Coinbase Head of Research, David Duong, the selloff isn’t just being driven by trepidation around the upcoming Jackson Hole meeting or fears about inflation. 

In a post on X, he wrote that the main reason is probably the large cash buildup in the U.S. Treasury’s account at the Federal Reserve. As the government pulls money into that account, it drains liquidity from the financial system, weighing on markets. “This explains why Bitcoin has lost trend alongside many equity names,” he said. “But we think the path forward looks clearer in September.”

The decline also followed deepening losses in cryptocurrency investment products on Tuesday, as fund outflows from Bitcoin and Ether surged to their second-largest levels this month. Spot Bitcoin exchange-traded funds (ETFs) saw $523 million in redemptions, more than quadrupling Monday’s outflows, according to data from Farside Investors. Ether ETFs recorded $422 million in withdrawals, doubling from $200 million the prior day. Combined, Bitcoin and Ethereum funds have now registered three straight days of outflows totaling $1.3 billion. 

Bitcoin-linked stocks were headed for a tepid opening during pre-market trading amid broader weakness in the market. Shares of Strategy (MSTR), the largest corporate holder of Bitcoin, edged 0.57% higher. Bitcoin miner Riot Platforms (RIOT) stock gained 0.42%, while shares of its peer, Mara Holdings (MARA), traded flat. Crypto exchange Coinbase Global’s (COIN) stock was up 0.7%.

Meanwhile, Ethereum’s price dipped 1.9% to around $4,200. On Stocktwits, retail sentiment around ETH dropped to ‘bearish’ from ‘neutral’ territory over the past day. Shares of Ethereum-holding companies, Bitmine Immersion Technologies (BMNR) and FG Nexus (FGNX), were mixed during pre-market trade. BMNR’s stock edged 0.86% higher, while FGNX’s stock traded flat.

Other major altcoins were also in the red during early morning trade. Cardano’s price took the biggest hit, falling more than 9% in the last 24 hours, followed by XRP’s price, which dipped 4% and Dogecoin’s price, which slid 2.3%. Solana’s (SOL) drop was more tempered, with its price edging 0.5% lower over the past day. 

The selloff in the crypto market led to more than $440 million in liquidations over the past 24 hours, according to Coinglass data. Most of the liquidations came from long bets–traders who bet that the price of cryptocurrencies would rise, amounting to around $362 million. Short liquidations were around $77 million. Ethereum experienced the largest liquidations of $172 million, followed by Bitcoin at $101 million.

Read also: Scott Bessent Says US Bitcoin Reserve Worth At Least $15 Billion, No Plans To Buy More BTC

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