Crypto markets took a beating this week as long-term rate fears and margin unwinds collided in ugly fashion.
Bitcoin fell roughly 6.2% between midnight UTC on Sunday and 10 am UTC today, dipping as low as about $103,600, the largest one-day drop since 10 Oct. Meanwhile, Ether slid about 10.6 % and assets such as Solana, Avalanche and Dogecoin also took sharp hits. Overall, crypto market capitalisation was down around 7.2 %, according to Coinbase data via TradingView.
By mid-afternoon, crypto markets were showing faint signs of recovery. Total market capitalization had inched 0.7% higher to $3.48 tn between 08:00 and 15:30 UTC, led by Solana, up 4.5%, followed by XRP and Dogecoin, each rising about 3.1%. Ether gained 2.0%, BNB added 1.9%, and Bitcoin remained flat over the session. The move suggested selective dip-buying rather than a broad rebound, as traders tested support after this week’s heavy losses.
Chart: Crypto Total Market Cap (14.30 UTC Sunday to 14.25 Tuesday). Source: CoinMarketCap
Just after the New York session opened, Bitcoin touched $102,583 on Coinbase, its lowest level since late June 2025, underscoring how fragile sentiment remains despite modest midday stabilization.
Market reacts to cautionary Fed tone
Analysts said the pullback reflected a broader shift in risk sentiment following cautionary comments from Federal Reserve officials and a rebound in US Treasury yields. CoinGlass data showed 236,739 traders were liquidated in the past 24 hours, with total liquidations of around $801.2mn
Glassnode data show a sharp cooling in speculative leverage. The total funding paid by long positions in Bitcoin perpetuals fell about 62% since mid-August, dropping from roughly $338mn to $127mn. The pullback points to waning risk appetite, as traders grow less willing to pay premiums to keep bullish positions open.
Sentiment deteriorated further as the Crypto Fear and Greed Index dropped from 36 on Sunday night to 27 as of 16:00 UTC Tuesday, reflecting rising investor fear.
Analysts for the crypto exchange Bitfinex told Barron's, "The market sits in a fragile equilibrium. We are not yet in a capitulation phase from [top buyers], but they are showing signs of waning conviction. Unless the price recovers decisively above this range, time becomes a growing headwind for bulls, as prolonged stagnation historically erodes sentiment."
Alexander Zdrakov, a market analyst at CryptoDnes, said sentiment remains fragile. “Crypto is in risk-off mode, fear is high, liquidity is low, and everyone’s watching macro data. The next move depends on what the Fed does next.”
ETF outflows deepen the pressure
Data from Farside Investors showed US Bitcoin ETFs recorded $186.5mn in outflows on Monday, less severe than late last week, when outflows reached $470.7mn on Wednesday, $488.4mn on Thursday, and $191.6mn on Friday. Ether ETFs also saw $135.7mn in outflows on Monday.
Onchain data from Glassnode showed exchange inflows rising as traders moved holdings to sell, while funding rates across major derivatives venues turned negative, signalling renewed bearish positioning.
Charles Edwards, founder of Capriole Investments, warned that institutional demand had cooled. “Institutional demand for Bitcoin has fallen below the rate of new coin issuance for the first time in seven months, signalling major buyers may be retreating.”
At press time, Bitcoin was trading around $103,200, with 24-hour trading volume standing at around $84.6bn.
