Українська
Русский
English
Crypto Market Capitalization Falls to an 8-Month Low as Analysts Predict Further Declines
The total cryptocurrency market capitalization has fallen to an eight-month low, erasing all gains made this year. Analysts remain pessimistic in the short term.
According to CoinGecko, total market capitalization at Thursday’s close dropped to $2.93 trillion, the lowest level since April.
The total value of the crypto market has declined by approximately 33% from its all-time high of $4.4 trillion reached in early October and nearly 14% year-to-date. This has led many analysts and observers to declare the onset of a “bear market.”
On April 9, market capitalization fell to a 2025 low of $2.5 trillion, before recovering to a record high six months later. Since March 2024, crypto market capitalization has largely traded within a range, and it has now returned to the midpoint of that range.
Bank of Japan Raises Interest Rates
MN Fund co-founder Michaël van de Poppe said on Friday that more short-term pain is likely and that the downtrend will persist until the Bank of Japan makes a decision on interest rates.
On Friday morning, Japan’s central bank raised its rate to 0.75%. While some analysts see this as bad news for cryptocurrencies, Bitcoin (BTC) rose by 2.3%.
Source: Michaël van de Poppe
“I wouldn’t be surprised if BTC continues to drop and capitulates within the next 24 hours, as the trend is clearly downward,” van de Poppe said. “That would imply a 10–20% decline in altcoins, after which they should recover fairly quickly.”
Pullback Creates Buying Opportunities
The recent drop in total market capitalization “reflects a broader correction driven by macroeconomic pressures and reduced investor risk appetite,” said Nick Ruck, director of LVRG Research, in an interview with Cointelegraph.
“Despite ongoing short-term volatility, this downturn presents potential accumulation opportunities in fundamentally strong projects, as the sector continues to mature and attract institutional capital,” he added.
Public Sentiment at Record Lows
Blockchain analytics platform Santiment reported on Friday that sentiment in the crypto community has turned negative again, with bearish commentary appearing across social media following another minor pump-and-dump on Thursday.
“Comments are largely filled with fear after Bitcoin surged to $90,200 yesterday and then quickly retraced to $84,800,” the report said.
Santiment noted that historically, retail investors tend to support bearish sentiment more often than bullish sentiment.
“Prices move in the opposite direction of the crowd’s expectations, so this fear-driven volatility is a positive signal for those patient enough to wait it out.”
Bear-market-level sentiment can lead to a sharp rebound. Source: Santiment
Meanwhile, the Crypto Fear & Greed Index dropped to 16, signaling “extreme fear,” and has remained below 30, in the “fear” zone, since early November.
See also: "Regulators Named the Main Threats to Crypto Investors Ahead of the New Year Holidays"
