The crypto market is entering a phase marked by increasing uncertainty and persistent selling pressure, as major assets struggle to regain bullish momentum. Bitcoin remains capped below the $90,000 level, repeatedly failing to attract enough demand to turn resistance into support.
At the same time, Ethereum is experiencing increased volatility and renewed selling pressure, reflecting broader risk aversion in the market. Sentiment has weakened and price action suggests investors are becoming increasingly selective rather than aggressively positioning for upside.
However, according to an analysis by XWIN Research Japan, the most significant change currently occurring in crypto is not visible directly in price charts, but in how and where capital is positioned. On-chain data shows that global liquidity within the crypto ecosystem has not left the market. Instead, he changed shape.
The total supply of ERC20-based stablecoins has expanded to around $160 billion, sitting near all-time highs. Although this supply briefly contracted during the risk-averse environment of 2022, it has since resumed a clear and sustained upward trend.
This behavior does not indicate that capital is fleeing crypto. Rather, it reflects a temporary reduction in the funds’ risks while remaining fully within the ecosystem. Capital accumulates in stablecoins as “standby liquidity,” sitting on the sidelines and ready to be deployed once clearer directional signals emerge. Liquidity has not disappeared; he is simply paused, patient and awaiting conviction.
Japan’s strategic position in global capital transfer
The analysis also highlights that this change in global capital behavior has significant implications for the Japanese crypto market. As regulation improves and tax frameworks become progressively more accommodative, Japan stands to benefit from a return of domestic capital that has remained cautious in recent years.
Combined with renewed interest from individual investors, this re-entry of marginalized capital could increase local liquidity, improve price discovery, and strengthen Japan’s role in the broader global crypto landscape.
A key element of this transition is the growing relevance of JPYC, Japan’s yen-denominated stable currency. As US dollar-based stablecoins continue to dominate global crypto flows, a native yen digital currency offers Japan a strategic differentiator.
JPYC is not limited to speculative trading use cases; it is increasingly considered as an infrastructure capable of supporting real economic activity. This includes integration with Web3 services, as well as domestic and cross-border payment applications that more closely align with Japan’s existing financial systems.
Looking ahead, the report suggests that the Japanese crypto market may gradually move away from a narrow focus on short-term price speculation. Instead, it could evolve into an ecosystem where capital actively circulates and is deployed for practical use cases. Ultimately, how effectively Japan absorbs and channels this mobile liquidity globally will play a central role in defining the next phase of market growth.
Crypto Market Tests Structural Support Amid Broad Risk Aversion
The total cryptocurrency market capitalization is showing clear signs of structural stress after failing to maintain momentum above recent highs. As the weekly chart shows, the total market capitalization has moved back towards the $2.9-$3.0 trillion area, an area that is now a critical inflection point for the entire market. This level coincides with rising 100- and 200-week moving averages, reinforcing its importance as medium to long-term support.
The rejection of the $4 trillion zone marks a decisive change in market structure. After a prolonged expansion phase through 2024 and early 2025, the market has entered a corrective regime characterized by lower highs and weakening bullish tracking. The behavior of the volumes supports this interpretation: selling pressure increased during the declining weeks, while rebound attempts encountered relatively moderate participation.
Despite this decline, the long-term trend has not completely broken. The market remains well above the 2022-2023 base, suggesting that this move resembles a consolidation or reset of valuations rather than a complete structural collapse. However, continued trading below short-term moving averages indicates that risk appetite remains subdued.
For the bullish structure to reassert itself, the total market capitalization must stabilize above the $3 trillion threshold and find the intermediate resistance near $3.3 to $3.5 trillion. Failure to maintain current support would expose the market to a deeper retracement towards the $2.4-2.6 trillion region, where stronger historical demand had previously emerged.
Featured image from ChatGPT, chart from TradingView.com
Editorial process as Bitcoinist focuses on providing thoroughly researched, accurate and unbiased content. We follow strict sourcing standards and every page undergoes careful review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance and value of our content to our readers.
