Against the backdrop of the overall market downturn, Dogecoin (DOGE) and xrp (XRP) led declines among major tokens as traders took profits from gains earlier in the week, while the U.S.-listed Bitcoin (BTC) exchange-traded fund (ETF) snapped a seven-day streak of inflows.

DOGE fell 5 percent and XRP fell 4 percent as bitcoin failed to extend Monday's rally to nearly $70,000. Over the past seven days, the two tokens have led major currencies higher on Elon Musk's support and fundamental developments, respectively.

The broad-based CoinDesk 20 (CD20), a liquidity index that tracks tokens with well-known market caps, fell nearly 2 percent, while Bitcoin fell 1 percent. However, traders expect Bitcoin to rise to $80,000 in the coming weeks as the U.S. election approaches, regardless of who is elected president.

The market for mid - and small-cap stocks was generally flat. However, BONK and governance token APE fell more than 7 percent, leading smaller tokens lower.

Traders pointed to key resistance levels in Bitcoin and the suspension of stablecoin issuance as one of the reasons for the slow upward trend of Bitcoin and other cryptocurrencies.

Alex Kuptsikevich, market analyst at FxPro, told CoinDesk in an email: "The main reason for the decline in the entire cryptocurrency market appears to be Bitcoin, with shorts preventing Bitcoin from falling to the $70,000 level. Early Monday, the bears increased their selling at $695,000 and on Tuesday morning brought the price down to $665,000."

Kuptsikevich said: "Since the end of September, stablecoin trading volume has not increased, which may put the growth of the entire cryptocurrency market on hold, as stablecoins are often seen as a quick liquidity to buy tokens of interest." The previous growth momentum was from August to September, when the overall cryptocurrency market cap pushed up from the bottom."

Previous analysis by CoinDesk has shown that the liquidity and growth of stablecoins are closely linked to the rising price of bitcoin and cryptocurrencies.

The Bitcoin ETF posted a net loss of $80 million on Tuesday, with Ark Invest's ARKB outflows of $134 million, a record high for the product. Blackrock's IBIT inflow of $42 million led inflows, while Fidelity's FBTC and VanEck's HODL saw inflows of $8 million and $3 million, respectively.

Meanwhile, BlackRock's Ether ETF saw inflows of $11 million on Tuesday, while other products saw no inflow or outflow activity.