Crypto markets have faced notable weakness in September 2025 as investors increasingly shift their attention to traditional equities. This dramatic downturn followed a significant liquidation event, wiping out over $1.7 billion in leveraged crypto positions within just 24 hours, with the vast majority being long bets that anticipated continuing price growth. Nearly one billion dollars of those liquidations occurred in a single hour, impacting over 400,000 traders and sending shockwaves throughout the sector.

Key cryptocurrencies saw sharp price drops, with Bitcoin falling below $113,000 and Ethereum retreating to just above $4,000. Major altcoins like XRP, Solana, Cardano, and Dogecoin also experienced steep declines, many plunging 6–10% or more in a matter of days.

Several factors have driven this unprecedented volatility. High leverage usage combined with shrinking market liquidity left the crypto sector highly exposed to sudden price swings. The volatility was amplified by a massive options expiry, with more than $17.5 billion in Bitcoin and $5.5 billion in Ethereum contracts maturing, increasing uncertainty and fueling fears of a broader crypto crash.

Macroeconomic factors have also played a crucial role. The U.S. Federal Reserve’s decision to limit rate cuts in response to stubborn inflation boosted the U.S. dollar’s strength and diminished global demand for digital assets, which are predominantly priced in dollars. Diverging monetary policies elsewhere have further fragmented capital flows, with regulatory complexity adding another layer of risk and confusion for investors.

Market sentiment in crypto has historically soured in September, a trend sometimes labeled as the “Red September” curse, and 2025 proved no exception. Technical patterns such as Bitcoin failing to break above key resistance levels, along with the confirmation of bearish trends, further accelerated the sell-off.

Despite the market’s turbulence, some analysts see signs that underlying conditions could shift if monetary policies stabilize and global macroeconomic conditions improve. For now, however, heightened volatility and weak sentiment continue to dominate the crypto landscape as more investors rebalance into stocks, seeking perceived safety amid broader financial uncertainty.