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The global cryptocurrency market capitalization has fallen to its lowest level in eight months, wiping out much of 2025’s gains and reinforcing concerns that the market has entered a deeper corrective phase.According to data from CoinGecko, total crypto market value slipped to $2.93 trillion in late Thursday trading — the weakest level since April. The decline marks a sharp reversal from the market’s early-October peak near $4.4 trillion, representing a drawdown of roughly 33% from all-time highs.Yearly Gains Erased as Market Returns to Range LowsThe pullback has erased nearly all of this year’s gains, with total crypto market capitalization now down about 14% year-to-date. After bottoming near $2.5 trillion in April, the market staged a strong recovery through mid-year before stalling and rolling over in recent weeks.Since March 2024, crypto market cap has largely traded within a broad range — and the latest move has pushed valuations back toward the middle of that long-standing consolidation zone.Bank of Japan Rate Hike Adds to Global Macro PressureMacro uncertainty remains a key driver of risk aversion. On Friday, the Bank of Japan raised interest rates to 0.75%, the highest level in three decades, adding another tightening signal at a time when global liquidity conditions remain fragile.MN Fund co-founder Michaël van de Poppe warned ahead of the decision that short-term downside risk remained elevated.“Wouldn’t be surprised if BTC continues to cascade and gets itself into a form of capitulation in the next 24 hours, as the trend clearly is down,” van de Poppe said, adding that altcoins could see 10%–20% drawdowns before stabilizing.Despite those concerns, Bitcoin briefly rebounded more than 2%, underscoring the market’s heightened volatility and conflicting macro signals.Analysts See Pain Ahead — but Also Accumulation OpportunitiesMarket participants remain divided on what comes next. While short-term sentiment is decisively bearish, some analysts argue the drawdown could present opportunities for long-term investors.Nick Ruck, director at LVRG Research, said the decline reflects a broader reassessment of risk across global markets.“This pullback reflects a broader correction driven by macroeconomic pressures and reduced risk appetite,” Ruck said.“While short-term volatility persists, it may present accumulation opportunities in fundamentally strong projects as the sector continues to mature and attract institutional capital.”Crypto Sentiment Hits Extreme Fear LevelsOn-chain analytics firm Santiment reported that crypto market sentiment has fallen back into deep fear territory, with bearish commentary dominating social media platforms following sharp intraday reversals.Bitcoin’s recent move — bouncing above $90,000 before quickly retracing below $85,000 — intensified pessimism among retail traders.Historically, Santiment noted, extreme bearish sentiment from retail investors has often coincided with local market bottoms, as prices tend to move opposite prevailing crowd expectations.Meanwhile, the Crypto Fear & Greed Index dropped to 16, firmly within “extreme fear,” and has remained below 30 since early November — a level typically associated with heightened volatility and capitulation risk.Market at a Critical JunctureWith liquidity thinning toward year-end and macro uncertainty still unresolved, analysts caution that further downside remains possible before any sustained recovery takes hold.At the same time, the combination of extreme fear, compressed valuations, and selective institutional accumulation suggests the market may be approaching a critical inflection point — one that could define sentiment heading into 2026.