The cryptocurrency market recorded large-scale liquidations as macroeconomic uncertainty and risk-off sentiment weighed on it. In a day, $369.67 million worth of derivatives positions were forcibly liquidated, sending bitcoin and major altcoins broadly lower.

On Sept. 2, blockchain outlet U.Today reported that the market drop was concentrated in major altcoins such as XRP, Ethereum and Solana. Total cryptocurrency market capitalisation fell to around $2.59 trillion to $2.70 trillion.

Key factors cited as triggering the decline include a rise in international oil prices and U.S. Treasury yields. West Texas Intermediate crude rose above $90 to $92 a barrel, and the U.S. 10-year Treasury yield climbed to 4.78 to 4.79 percent, the peak in this cycle.

As inflation pressure and the burden of rates increased, appetite for risk assets also weakened. Market participants priced in a 66 percent chance of a U.S. Federal Reserve rate hike on Sept. 16. With rates rising and oil surging at the same time, selling pressure in the crypto market is seen as having widened.

Liquidations were concentrated in leveraged long positions. Of the total $369.67 million liquidated, long-position liquidations came to $301.84 million, accounting for most of the total. Short positions saw $67.83 million liquidated.

The number of leveraged traders forcibly liquidated topped 90,000 on the day. About $141.44 million was liquidated over 12 hours, and another $82.10 million worth of positions was closed out in the four hours before dawn.

By asset, bitcoin recorded the largest liquidation total. Bitcoin liquidations were tallied at $111.83 million, and the price fell 1.3 to 1.8 percent to the $77,200 to $77,600 support zone.

Ethereum fell about 2 percent to around $2,410 to $2,430. Ethereum liquidations totalled $95.39 million, and on Binance a $11.99 million Ethereum position was forcibly closed as the day’s biggest single liquidation.

Solana also dropped 2 to 3.5 percent, slipping below the psychological support level of $100. The price at one point fell to $98.47, and liquidations were tallied at $27.09 million.

XRP also showed weakness. The price fell as a scheduled escrow release coincided, but fund flows through spot ETFs were relatively resilient.

According to Sosovalue data, bitcoin spot ETFs saw net outflows of $236.46 million. By contrast, Ethereum, Solana and XRP spot ETFs posted net inflows of $10.95 million, $10.19 million and $14.38 million, respectively. In particular, cumulative inflows into XRP ETFs over the past 11 days were put at $170.00 million.

As price declines and institutional fund flows diverged, some cryptocurrencies rose instead. Filecoin jumped 14 to 15 percent on demand for decentralised AI data storage, and Uniswap rose about 11 percent alongside improvements in indicators related to Aave and Curve.

Moves by long-term bitcoin holders are also drawing attention. They returned to net buying for the first time in about a month, showing a supply-demand flow different from short-term selling pressure.

The U.S. Securities and Exchange Commission is also moving to revamp rules with a view to shifting not only the crypto market but also traditional financial market infrastructure to blockchain. The SEC proposed a comprehensive overhaul of rules related to transfer agents and aims to update regulations to fit public blockchains, tokenised stocks and an AI environment.

A roundtable is also scheduled for Sept. 17 with participants including BlackRock, Citadel Securities, Nasdaq, the New York Stock Exchange, DTCC and Robinhood. The meeting is set to discuss introducing a 24-hour trading system to the stock market.

The SEC overhaul focuses on a continuous settlement system and overnight supervision, an instant clearing system, and measures to protect retail investors outside regular trading hours.

If 24-hour or always-on trading is introduced in traditional financial markets, some forecasts say the crypto market’s differentiation of “24/7, 365-day trading” could shrink.

Banks are also continuing moves to build blockchain-based financial infrastructure. A bank consortium led by Citi and Goldman Sachs is developing a dollar-pegged stablecoin with a target launch in 2027, and the London Stock Exchange and Kraken’s owner are also testing a blockchain shift for large UK stocks.

The industry views the SEC’s move as a signal of expanding points of contact between traditional financial markets and blockchain technology. Securitize, a BlackRock partner, said the new rules should not lower standards but rather raise them, and assessed updating the regulatory framework to match market change as a necessary step.

Nate Geraci of ETF Store assessed that major Wall Street financial institutions have now moved beyond debating whether crypto will survive. He said the focus of current discussions is on how to coexist with crypto within the existing financial system or replace it.

In the short term, market attention is expected to turn to new U.S. jobless data due on Sept. 3. September is seen as a seasonally weak month, with bitcoin closing lower in 8 of 13 instances since 2013.

This time, inflation worries from rising oil prices and the burden of higher rates are overlapping, increasing the chance of even greater volatility. Still, funds are flowing into some spot ETFs and certain cryptocurrencies despite the price correction, and long-term holders are buying, so the market’s direction is expected to be determined by macroeconomic indicators, institutional flows and U.S. regulatory changes together.