What to expect as Bitcoin bleeds and crypto market cap shrinks?

Bitcoin faces mounting selling pressure and pulls back close to $95,000 support on Wednesday.
Top 5 altcoins struggle while XRP leads with over 2% gains on the day.
The crypto market cap erased 7% of its value in the past 24 hours, down to $3.49 trillion.
Experts believe Bitcoin price may consolidate further before demand returns to the market.

Bitcoin (BTC) briefly slipped below $95,000 on Wednesday before recovering above that level. Bitcoin’s crash ushered a market-wide correction in crypto, sending altcoins in the top 5 lower except XRP that held on to recent gains and added nearly 2% on the day.

Ethereum (ETH), Binance coin (BNB) and Solana (SOL) correct slightly on the day, while BTC loses nearly 2% value.

Is this the end of the Bitcoin bull market?

Bitcoin’s gains in 2024 were attributed to institutional investment inflow and approval of US-based Spot Exchange Traded Funds (ETFs). While institutional interest is slowly returning, macroeconomic factors and the strength of the United States (US) dollar are influencing the BTC price trend in 2025.

David Morrison, Senior Market Analyst at Trade Nation, told FXStreet:

“Bitcoin is proving to be a bit of a disappointment. Having surged above $100,000 on Monday afternoon, it crashed back down through it again just a scant 24 hours later. It has continued to come under selling pressure this morning and is currently back to levels last seen on Thursday as it built up momentum for its push higher.”

“The daily MACD has certainly dropped back sharply from ‘overbought’ levels seen through November and December. But it may need to find a floor and consolidate further before buyers return. Unless, of course, there’s a significant boost in overall market ‘risk appetite’,” he added.

While Morrison awaits a return in demand in the crypto market to spot a silver lining, Ilya Volkov, CEO of YouHodler, believes that traders may not see the same growth in crypto as seen in 2024.

“The primary driver of cryptocurrency growth last year was the launch of ETFs, which spurred significant demand for crypto assets among retail investors. In 2025, we anticipate a correction in global stock indexes, which could also impact cryptocurrency ETFs and lead to a decline in crypto valuations. It is difficult to predict the depth and duration of this correction, but a key indicator will be the performance of the S&P 500 index, which often sets the tone for other global stock markets," said Volkov.

Volkov has a bearish outlook on crypto in 2025, which is confirmed by the underwhelming Bitcoin ETF flow on Tuesday after two days of significant inflows on Friday and Monday.

Crypto market cap shrinks by 7% in 24 hours, where is crypto headed?

With crypto market capitalization down to $3.49 trillion as of Wednesday, traders are concerned about the state of the ecosystem and what to expect from altcoins in 2025. Bitcoin’s dominance reduced on the weekly and the daily timeframe, hovering around 57%.

The total altcoin market capitalization shows signs of recovery on the daily chart in TradingView.

The market cap of all cryptocurrencies excluding Bitcoin remains far below its 2021 bull run peak of $1.71 trillion. Until there is a recovery in this metric, the future of the Bitcoin bull run likely remains unclear in 2025.

Total 2 market capitalization (excluding Bitcoin)

The average volume of Bitcoin traded across spot exchanges reduced by 15% week-on-week, according to a K33 Research report published on Tuesday. While traders await the return of demand and buying pressure to crypto, liquidations in either direction are likely to occur in Bitcoin and top altcoins on derivative exchanges.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.