In the early hours of trading in the United States, the cryptocurrency market faced a sharp downturn. Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all experienced significant declines, leading to the liquidation of $120 billion in assets. This sell-off caused the overall market capitalization to drop by 2.5%, settling at $2.52 trillion.

Bitcoin's price dropped by more than 3%, trading at $67,241, while Ethereum and Ripple also saw declines, with XRP falling by 1.73% to $0.5188. The widespread downturn has created increased volatility across the broader crypto market.

On-chain data indicates a notable increase in cryptocurrencies being moved to exchanges, suggesting that more investors are preparing to sell their holdings. This influx of supply often leads to lower prices, exacerbating the current bearish sentiment in the market.

Further highlighting the market's health, metrics such as active addresses, transaction volumes, and network activity have shown declines, indicating reduced investor engagement and activity within the crypto ecosystem.

Recent developments in regulatory and economic news have also contributed to the market's downturn. The release of the Federal Open Market Committee (FOMC) Minutes, expressing concerns about inflationary pressures, has made traders more cautious. Additionally, regulatory actions, including the SEC's conservative stance on recent crypto legislation and its emphasis on investor disclosures, have added to the negative sentiment.

The pullback in the crypto market has been influenced by strong economic growth signals, as indicated by the S&P Global Purchasing Managers' Index (PMI) report, suggesting that the US economy is experiencing its fastest expansion in two years. This robust economic performance has shifted trader expectations regarding potential interest rate changes, further impacting Bitcoin and other digital currencies negatively.

In conclusion, the cryptocurrency market has faced significant challenges recently, with major coins like Bitcoin, Ethereum, and Ripple experiencing sharp declines amid increased market volatility and regulatory uncertainties.