Cryptocurrency Market Enters Sharp Downturn
The global cryptocurrency market is experiencing a significant correction, having lost substantial ground after hitting a record high earlier this month. Traders are pulling back their investments amid growing fears of even deeper losses, creating a wave of uncertainty across digital asset platforms.
From Record Highs to Steep Losses
The downturn marks a dramatic reversal from the market's peak on October 6, when the total market capitalisation of all cryptocurrencies reached a staggering $4.4 trillion. However, a sharp 20% slump since that high has effectively erased the majority of this year's impressive gains. According to data from CoinGecko, the asset class is now up by a mere 2.5% for the year 2025.
The sell-off began almost immediately after the all-time high was recorded. A triggering event was the sudden liquidation of roughly $19 billion in leveraged positions, a massive move that shattered investor confidence and set off a chain reaction. Since this event, traders have shown little appetite for betting on a quick market rebound, preferring to wait on the sidelines.
Bitcoin and Altcoins Bear the Brunt
Bitcoin, the world's largest cryptocurrency, has been hit hard, falling 9% in a single week. This puts it on track for its worst weekly performance since March. In a technically significant development, Bitcoin has also slipped below its 200-day moving average, a crucial support level that had held firm since the 2022 bear market. As of Friday afternoon in London, Bitcoin was trading just below the psychologically important $100,000 mark.
While the entire crypto market has felt the pain, altcoins—the smaller and more volatile tokens—have suffered the steepest losses. These assets have lagged far behind both Bitcoin and Ether throughout this downturn, highlighting their increased risk profile.
Expert Insight and a Glimmer of Hope
According to a Bloomberg report, Jeff Mei, Chief Operating Officer at the crypto exchange BTSE, has attributed the latest slide in digital assets partly to growing worries that AI stocks are excessively overvalued. He cautioned that a broader correction in the technology sector could significantly deepen the ongoing crypto slump.
"If AI and tech stocks see a major selloff, Bitcoin could easily slip below the $100,000 mark — and altcoins may tumble even further," Mei warned, connecting the fate of crypto to the wider tech landscape.
This downturn is particularly striking because it comes after what had been a largely bullish year for the sector. The market had been buoyed by increased regulatory clarity and growing institutional interest. A 35% rally in Bitcoin was earlier triggered by former President Donald Trump's push to make the US a global crypto hub. However, sentiment has reversed so sharply that the total crypto market value is now lower than when Trump took office.
Despite the gloom, there are tentative signs of stabilisation. After six consecutive days of withdrawals, US spot Bitcoin and Ether ETFs recorded $253 million in inflows on Thursday. This development offered a brief, but welcome, respite to the battered market, suggesting that some investors see value at these lower price levels.
