The crypto market has taken a huge hit in just a few days. Since Friday morning, over $325 billion (€310 billion) in market capitalization has evaporated, with a loss of $100 billion in just one hour on Monday evening.

What is striking is that this sudden crash occurred without any major news reports that would directly influence sentiment. According to analysts, including The Kobeissi Letter, the market has ended up in a situation in which liquidity has greatly decreased. The analysts explain what is currently happening in the crypto market.

Solana as a catalyst and broader market weakness

The correction seems to have started with Solana (SOL), which has fallen 22% since Friday. Solana had recently experienced a strong rise, partly due to the hype surrounding memecoins.

Now that the memecoin craze seems to be weakening, it has also affected Solana. Initially, the decline was limited to Solana, but when the S&P 500 index also began to fall on Friday, Bitcoin (BTC) was dragged down with it. Ethereum (ETH) is also showing weakness, putting additional pressure on the broader crypto market.

In addition, there is speculation that the announcement that Citadel Securities, a $65 billion investment firm, may become a liquidity provider in crypto, has caused a classic “sell the news” effect.

Did liquidity in crypto just dry up?

Crypto markets have now erased -$325 BILLION of market cap since Friday morning.

At 5:00 PM ET today, crypto lost -$100 billion in 1 HOUR without any major headlines.

What is happening with crypto? Let us explain.

(a thread) pic.twitter.com/6jJSu8U9gj

— The Kobeissi Letter (@KobeissiLetter) February 25, 2025

Bybit hack and return of volatility

Another important element that seems to be weighing on sentiment is the massive hack of Bybit on February 21.

This attack, which according to Arkham Intelligence is the “largest financial theft in history,” has led to a loss of more than $1 billion.

By comparison, the previous largest crypto hack was that of PolyNetwork in 2021, in which $611 million was stolen. These types of events undermine confidence in the market and can put further pressure on liquidity.

Furthermore, increased volatility in traditional markets is a factor. Risky assets, such as bitcoin, generally retreat when the broader market cools off.

However, analysts emphasize that such corrections are normal within a bull market, with declines of 10% or more being the rule rather than the exception.

Crypto remains dependent on liquidity

Nevertheless, according to The Kobeissi Letter, there is no single cause for the sudden crash. It seems to be a combination of reduced liquidity, market uncertainty and technical factors.

The fact remains that the crypto market depends on strong liquidity to remain healthy. The coming days will tell whether this decline heralds a long-term correction or is merely a temporary setback.