Bitcoin, Ethereum Slide Pull Crypto Market below $3trn

Bitcoin and Ethereum-led sell-offs dragged the global cryptocurrency market capitalisation below the $3 trillion mark on Tuesday, underscoring renewed investor caution driven by regulatory uncertainty, weak risk appetite and growing fatigue across altcoins.

Market volatility intensified as bears regained control, pushing major digital assets lower and erasing gains recorded earlier in the week. The global crypto market capitalisation fell to about $2.96 trillion during early trading, down from around $3.05 trillion the previous day, while 24-hour trading volume slipped below $100 billion, reflecting thinning liquidity.

Despite recent interest-rate cuts by the United States Federal Reserve that were expected to boost risk assets, sentiment in the crypto space remained subdued.

Analysts say lingering policy uncertainty and security concerns are weighing heavily on investor confidence, limiting the market’s ability to stage a meaningful rebound.

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Data from CoinMarketCap showed the market declined by about 2 per cent in the last 24 hours, with sell pressure expected to persist amid the absence of the widely anticipated year-end “Santa Claus rally.”

The latest downturn has been linked largely to regulatory jitters surrounding Bitcoin’s adoption in sovereign portfolios.

Concerns intensified after the International Monetary Fund confirmed ongoing discussions with El Salvador aimed at restricting public-sector Bitcoin activities, including halting further BTC purchases and gradually phasing out the government-backed Chivo wallet. The development has raised fresh questions about the sustainability of state-backed crypto adoption models.

At the same time, cybersecurity firm Kaspersky issued warnings over a new malware, “Stealka,” designed to target crypto wallets, prompting heightened caution among retail investors already wary of heightened market volatility.

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Derivatives data pointed to mounting downside pressure. Bitcoin liquidations surged to about $87 million, representing a 75 per cent increase within 24 hours, with long positions accounting for roughly 65 per cent of losses. Perpetual open interest climbed by 7.4 per cent to about $802 billion, signalling fresh bearish positioning and elevated leverage in the market.

Ethereum and Solana were not spared, recording liquidations exceeding $30 million each, as high leverage amplified price swings across major tokens. Analysts say the current retreat reflects a toxic mix of regulatory anxiety, derivatives-driven turbulence and broad-based altcoin fatigue.

Bitcoin slipped back below the $88,000 level after failing to sustain earlier gains, with traders closely watching whether the asset can hold key support around $85,000. Market participants are also monitoring policy signals from El Salvador and upcoming United States economic data that could reshape expectations around future interest-rate cuts.

Ethereum, trading around $2,900, has struggled to regain momentum, repeatedly failing to break above the $3,200 resistance level. The inability to reclaim this zone has capped short-term upside, reinforcing a cautious outlook for the broader crypto market as the year draws to a close.