The crypto market cap has hit an 8-month low
As the total crypto market capitalization fell to an eight-month low, wiping out all gains this year, analysts remain bearish on the short term.
Total market capitalization fell to $2.93 trillion in late trading Thursday, the lowest level since April, according to CoinGecko.
The crypto's total market capitalization is down 33% from its peak of $4.4 trillion in early October and is down nearly 14% earlier this year, prompting many analysts and observers to say that a bear market is underway.
It fell to a low of $2.5 trillion in 2025 before recovering to a peak six months later. The crypto market cap has been largely range-bound since March 2024, and is now back in the middle of that range.
Bank of Japan rate hike
Michael van de Pop, co-founder of MN Fund, said on Friday that further short-term pain is likely and the trend will continue downward until the Bank of Japan makes a decision on interest rates.
Japan's central bank rose 0.75% on Friday morning, and while some analysts said this would be bad news for crypto, Bitcoin (BTC) rose 2.3%.
“It wouldn't be surprising if BTC continues to fall and finds itself in a breakout mode in the next 24 hours,” van de Pop said. “This means -10/20% moves on altcoins, then it should grow faster.
Returns offer shopping opportunities
The recent decline in overall market capitalization “reflects a broader correction driven by macroeconomic pressures and a reduction in risk appetite among investors,” Nick Rook, director of research at LVRG, told Cointelegraph.
“Despite short-term volatility, this pullback presents opportunities to capitalize on fundamentally strong projects as the sector matures and attracts institutional capital,” he said.
Social sentiment at rock bottom
Blockchain analytics platform Santiment reported on Friday that crypto sentiment was once again at a level of fear, following another minor pump and dump on Thursday in a cryptic comment on social media.
“Opinion is mainly showing fear after Bitcoin surged to $90.2k yesterday and quickly pulled back to $84.8k,” he said.
Related: Crypto has everything it needs for a bull market, so why is the market down?
Sentiment notes that this is a strong signal as historically, retail has pushed the bearish narrative above the bull.
“Prices tend to move against public expectations, so this volatility, while being observed with fear, is a good sign for those who are impatient to ride it out.”
Meanwhile, the crypto fear and greed index was buried at 16, which indicates “extreme fear”, and has been below 30 in the “fear” range since the beginning of November.
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