The cryptocurrency market faced a severe downturn on September 25, 2025, as a cocktail of macroeconomic headwinds, leveraged liquidations, and regulatory uncertainty triggered broad selling pressure. Federal Reserve Chair Jerome Powell's hawkish stance, emphasizing a slow approach to interest rate cuts, spurred a stronger U.S. dollar, sapping risk appetite across digital assets.
Total market capitalization plunged by over $162 billion in September alone, with Bitcoin (BTC) dropping more than 1% to below $112,000 and Ethereum (ETH) falling over 3% to test $4,000 for the first time since August. Altcoins like Solana (SOL), XRP, and Dogecoin (DOGE) declined between 2.6% and 3%, exacerbated by over $1.7 billion in leveraged position liquidations that accelerated the sell-off.
Concerns over a potential U.S. government shutdown added to the gloom, with Polymarket traders pricing a 76% probability by year-end and 63% odds by October 1. The White House's preparations for job cuts heightened uncertainty, while seasonal factors—the historically weak September for crypto—played a role. Despite the pain, Bitcoin ETF inflows flipped positive on September 24, led by BlackRock's IBIT buying $128 million of BTC, offering a glimmer of hope for a rebound if macro conditions stabilize.