Crypto market cap falls to 8-month low, analysts see more pain ahead

The total crypto market capitalization has fallen to an eight-month low, erasing much of this year’s gains, as analysts remain bearish in the short term.

Total market capitalization fell to $2.93 trillion in late trading on Thursday, its lowest level since April, according to CoinGecko.

The total market value of crypto has declined by around 33% since its all-time high of around $4.4 trillion in early October and is down almost 14% since the beginning of this year, prompting many analysts and observers to claim the bear market is underway.

It fell to a 2025 low of $2.5 trillion on April 9 before recovering to all-time highs six months later. The crypto market cap has been largely range-bound since March 2024, and it has now returned to the middle of that range.

Bank of Japan hikes rates

MN Fund co-founder Michaël van de Poppe predicted on Friday that more short-term pain is likely and the trend will continue downward until the Bank of Japan makes its decision on interest rates.

Japan’s central bank raised rates to 0.75% Friday morning, and while some analysts have said this will be bad news for crypto, Bitcoin (BTC) climbed by 2.3%.

_Source: _Michaël van de Poppe

“Wouldn’t be surprised if BTC continues to cascade and gets itself into a form of capitulation in the next 24 hours, as the trend clearly is down,” van de Poppe said. “That would mean -10/20% move on altcoins, which then should be bouncing quite quickly.”

Pullback presents buying opportunities

The recent decline in total market capitalization “reflects a broader correction driven by macroeconomic pressures and reduced risk appetite among investors,” Nick Ruck, director of LVRG Research, told Cointelegraph.

“While short-term volatility persists, this pullback presents potential accumulation opportunities in fundamentally strong projects as the sector continues to mature and attract institutional capital,” he said.

Social sentiment at rock bottom

Blockchain analytics platform Santiment reported on Friday that crypto sentiment was at fear levels again, with bearish commentary on social media following another minor pump and dump on Thursday.

“Commentary is mainly showing fear after Bitcoin bounced to $90.2K yesterday, and then quickly retraced to $84.8K,” it stated.

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Santiment noted that historically, it is a strong sign when retail is pushing the bearish narrative harder than the bullish.

“Prices move opposite to the crowd’s expectations, so this volatility, being marked by fear, is a good signal for those who are patient enough to ride this out.”

_Social sentiment at bear market levels could cause a quick bounce. Source: _Santiment

Meanwhile, the crypto Fear & Greed Index was buried at 16, indicating “extreme fear,” and has remained below 30 in “fear” territory since the beginning of November.

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