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The crypto market has entered a renewed phase of weakness, with total market capitalization slipping to $2.93 trillion, the lowest level in eight months. The decline has erased year-to-date gains, and analysts anticipate further downside before stability returns.
According to CoinMarketCap, the crypto market has fallen from its October peak of around $4.4 trillion to the current level at $2.93 trillion, nearly a 33% fall in just a few months and around 14% since the start of the year.
The current price levels have pushed the market back into the range it has been in since early 2024, indicating indecision.
Market experts consider the low prices to be the result of tight global liquidity conditions, cautious central bank policy signals, and falling interest in speculative assets.
The Bank of Japan has raised its policy rate to 0.75%, the highest level since 1995, adding to uncertainty. Although the hike was expected, it led to adjustments in global trade, particularly in the yen.
Some analysts argue that this transition might cause a temporary withdrawal of money from high-risk assets such as cryptocurrencies.
Despite the concerns, Bitcoin briefly traded in the $87,000 to $88,000 range. Yet experts warn that short-term increases might not necessarily signal a reversal in trend.
MN Fund co-founder Michaël van de Poppe said, “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.”
He also added, “That would mean -10/20% move on altcoins, which then should be bouncing quite quickly.”
The Crypto Fear & Greed Index, currently near extreme fear levels, has remained below neutral territory for weeks.
On Dec. 15, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, shared a chart comparing the Dow Jones Industrial Average in 1929 and the Bloomberg Galaxy Crypto Index in 2025 and highlighted similarities between the two.
Both periods, set apart by nearly a century, indicate a strong surge towards a peak followed by a sell-off leading towards the ultimate crash.
He said, “The first-born crypto was like a beach ball held underwater until the reelection of President Donald Trump in 2024.”
Notably, the Bloomberg strategist has been very bearish on BTC and has repeatedly warned of a price drop to as low as $10,000.
Also Read: Why Bitcoin Needs Economic Growth More Than Another Bull Run
Another important development is Bitcoin’s underperformance versus gold. Although BTC continues to trade in the $86,000-$90,000 zone, its gold ratio has fallen to 20.18, the lowest since early 2024.
Derivatives markets also stress caution. For a few of the leading tokens, funding rates have become negative, indicating that short positions are being taken.
Options markets also show persistent demand for downside protection, particularly in Bitcoin and Ethereum.
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