The crypto market's total capitalization has fallen to an eight-month low, erasing all gains this 12 months as analysts remain bearish within the short term.
According to CoinGecko, the full market capitalization fell to $2.93 trillion in late trading on Thursday, its lowest level since April.
The total market value of cryptocurrencies has fallen about 33% since its all-time high of around $4.4 trillion in early October and has fallen nearly 14% for the reason that start of this 12 months, leading many analysts and observers to say that a bear market is underway.
On April 9, it fell to a 2025 low of $2.5 trillion before hitting an all-time high again six months later. The crypto market cap has been largely range-bound since March 2024 and has now returned to the center of that range.
The Bank of Japan is raising rates of interest
Michaël van de Poppe, co-founder of the MN Fund, predicted on Friday that further short-term problems were likely and the downward trend would proceed until the Bank of Japan makes its decision on rates of interest.
Japan's central bank raised rates to 0.75% on Friday morning, and while some analysts said this might be bad news for crypto, Bitcoin (BTC) climbed 2.3%.
Source: Michael van de Poppe
“I wouldn’t be surprised if BTC continues to cascade over the subsequent 24 hours and enters some type of capitulation because the trend is clearly down,” van de Poppe said. “That would mean a -10/20% move in altcoins, which should then get better fairly 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.
“While near-term volatility continues, this decline presents potential accumulation opportunities in fundamentally strong projects because the sector continues to mature and attract institutional capital,” he said.
The social mood is at its lowest point
Blockchain analytics platform Santiment reported on Friday that crypto sentiment was back to fear levels, with pessimistic comments on social media following one other small pump-and-dump on Thursday.
“After Bitcoin rose to $90.2k yesterday after which quickly fell back to $84.8k, comments are mostly showing fear,” it said.
Santiment noted that historically, when retail pushes the bearish narrative more strongly than the bullish one, it’s a powerful sign.
“Prices are moving against crowd expectations, so this fear-driven volatility is an excellent signal for those patient enough to ride it out.” 
Social sentiment at bear market levels could lead on to a fast rebound. Source: Santiment
Meanwhile, the cryptocurrency's Fear & Greed Index was at 16, indicating “extreme fear,” and has remained below 30 within the “fear” zone since early November.
