The total market capitalization of cryptocurrencies fell to an eight-month low, erasing much of this year’s gains, with analysts remaining bearish in the near term.
The total market capitalization fell to $2.93 trillion in late trading Thursday, its lowest level since April, according to CoinGecko.
The total crypto market value has declined about 33% since its all-time high of around $4.4 trillion in early October and is down nearly 14% since the start of this year, prompting many analysts and observers to claim that the bear market is underway.
It fell to its 2025 low of $2.5 trillion on April 9, before returning to all-time highs six months later. The market capitalization of cryptocurrencies has been largely limited since March 2024, and it has now returned to the middle of this range.
Bank of Japan raises rates
MN Fund co-founder Michaël van de Poppe predicted on Friday that further short-term difficulties were likely and that the trend would continue downward until the Bank of Japan makes its decision on interest rates.
Japan’s central bank raised rates to 0.75% on Friday morning, and although some analysts said it would be bad news for crypto, Bitcoin (BTC) climbed 2.3%.
“I would not be surprised if BTC continues to fall and enters into some form of capitulation in the next 24 hours, as the trend is clearly downward,” van de Poppe said. “This would mean a -10/20% move on altcoins, which should then bounce back quite quickly.”
Pullback Presents Buying Opportunities
The recent decline in total market capitalization “reflects a broader correction driven by macroeconomic pressures and reduced investor risk appetite,” Nick Ruck, director of LVRG Research, told Cointelegraph.
“Even as near-term volatility persists, this pullback presents potential opportunities to accumulate into fundamentally strong projects as the sector continues to mature and attract institutional capital,” he said.
Social sentiment at its lowest
Blockchain analytics platform Santiment reported Friday that cryptocurrency sentiment was at fear levels again, with bearish comments on social media following another minor pump and dump on Thursday.
“The comments mostly show fear after Bitcoin rebounded to $90.2K yesterday and then quickly returned to $84.8K,” he said.
Related: Crypto has all the makings of a bull market, so why is the market down?
Santiment noted that historically, it’s a strong sign when retail pushes the bearish narrative harder than the bullish narrative.
“Prices are moving contrary to public expectations, so this volatility, marked by fear, is a good signal for those who are patient enough to weather this ordeal.”
Meanwhile, the crypto Fear & Greed Index was buried at 16, indicating “extreme fear,” and has remained below 30 in “fear” territory since early November.
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