Pressure on the crypto market is increasing. The total capitalization has dropped to $2.93 trillion — the lowest level in the last eight months. In fact, the market has lost almost all the gains of 2025 and has again found itself in a zone of heightened uncertainty.
From the peak values in October, when the capitalization reached $4.4 trillion, the market lost about a third of its value. Since the beginning of the year, the decline is nearly 14%, bringing the sector close to formal signs of a bear phase.
The market is stuck in a wide range
Looking more broadly, the crypto market has been moving sideways for over a year. Since March 2024, capitalization has fluctuated without a sustainable trend and is currently about in the middle of this corridor.
In the spring, the market already experienced a sharp drop — in April, capitalization fell to $2.5 trillion. That was followed by a powerful rebound and a new historical high a few months later. Now investors are trying to understand if this scenario will repeat or if the market has entered a more prolonged phase of decline.
Short-term pressure and the Japan factor
A number of analysts had warned in advance about potential increased pressure. The manager of MN Fund pointed out that the downward trend may persist until the Bank of Japan's decision on interest rates.
According to his estimate, bitcoin could enter a phase of accelerated decline and short-term capitulation, while altcoins might lose another 10-20% before attempting to recover. He separately noted that against this backdrop, gold could reach new historical highs.
As a result, the Bank of Japan did indeed raise the rate to 0.75%. Bitcoin itself reacted unexpectedly resiliently and rose by more than 2%, but this did not change the overall picture. Pressure on the market as a whole remains, and Ethereum and other major assets continue to look weak.
Investors are avoiding risk
The reasons for the decline remain largely macroeconomic. Market participants are reducing risk, preferring defensive assets. In such conditions, even positive local news does not lead to sustainable growth.
At the same time, some analysts consider the current correction a potential accumulation zone. The argument is simple: as the industry matures and institutional participation grows, strong projects may benefit from such phases of market cleansing.
Sentiments have shifted into the 'extreme fear' zone
Sentiment indicators confirm the tension. According to Santiment, after recent market fluctuations, the number of negative comments on social media has surged sharply. This occurred after bitcoin first rose above $90,000 and then quickly fell back to around $84,800.
The Fear and Greed Index dropped to 16, which corresponds to a state of 'extreme fear'. Values below 30 have been held since early November, indicating prolonged caution among retail investors.
Historically, such levels have often coincided with the formation of local lows. However, fear alone does not guarantee a reversal — the market can remain under pressure longer than participants expect.
Radical forecasts for bitcoin
Amid the decline in capitalization, extremely pessimistic forecasts are once again being voiced. A Bloomberg Intelligence analyst drew parallels between the current dynamics of the crypto market and the US stock market of the late 1920s.
According to him, the rapid growth and subsequent sell-off resemble a scenario in which the asset was 'held underwater' until 2024, and then released. This view allows for a decline in bitcoin down to $10,000.
An additional alarming signal is the ratio of bitcoin to gold, which has fallen to lows not seen since the beginning of 2024. This heightens concerns among some investors focused on defensive assets.
What’s next?
The crypto market is entering a difficult period. Capitalization has returned to levels seen at the beginning of the year, investor sentiment has worsened, and short-term risks remain high.
At the same time, market history shows that such phases often become turning points. While some participants prepare for further declines, others begin to cautiously look for opportunities — especially in assets with strong fundamentals.
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