Bitcoin, Ethereum, and XRP plummet 5%! Total Crypto market cap falls below $3.1 trillion

Cryptocurrency markets continued their decline in mid-December, with Bitcoin dropping to around $85,800 during Asian trading hours, along with Ethereum and XRP posting weekly declines of over 5%. The total market capitalization of cryptocurrencies slightly decreased to approximately $3.06 trillion, down more than 2% this week. This wave of selling occurred as investors awaited the release of key U.S. economic data. The crypto fear and greed index has fallen to 16, the lowest level in nearly three weeks.

Year-End Effect Triggers Liquidity Crisis

(Source: BitInfoCharts)

December is usually a low-liquidity period, as traders adjust their positions before year-end, which can lead to larger price fluctuations. This seasonal pattern has been especially evident this year, with synchronized declines in Bitcoin, Ethereum, and XRP indicating large-scale capital withdrawal from the market, rather than issues specific to individual tokens. Solana fell to $126, Dogecoin dropped to $0.129, and all major cryptocurrencies experienced weekly declines exceeding 5%.

FxPro Chief Market Analyst Alex Kuptsikevich stated via email: “Turning from an uptrend to horizontal support is not a positive signal for buyers. The selling pressure since late November has broken the short-term structure. The market is currently consolidating, and downward risks still exist.”

CoinEx Research estimates that in the past 30 days, the total market cap of cryptocurrencies has fallen by about 15%. Although the market has repeatedly held above the $3 trillion mark over the past 10 days, analysts say that the shift from an uptrend to sideways consolidation indicates weakening market momentum rather than a strong rebound. Without clear catalysts, the market remains in a state of panic long-term, echoing cyclical weakness often seen at the end of market cycles.

Global Risk Assets Decline in Tandem

The weakness in the crypto market is not an isolated phenomenon but part of a broader decline in global risk assets. Asian stock markets fell sharply, with the MSCI Asia-Pacific Index down 1.3%. U.S. stock futures also softened ahead of the November employment report, which is expected to show cooling labor market conditions. The U.S. dollar hovered near two-month lows, while the yen appreciated to around 155 yen per dollar. Market participants widely expect the Bank of Japan to hike interest rates later this week.

This global market linkage suggests that the declines in Bitcoin, Ethereum, and XRP are driven not only by internal crypto factors but also by macroeconomic uncertainty. Investors tend to reduce risk exposure ahead of key economic data releases, with cryptocurrencies as high-risk assets bearing the brunt.

Comparison of Technicals of the Three Major Coins

Bitcoin: Earlier this week, it briefly fell below $87,500 before rebounding to around $90,000, but its overall technical outlook has worsened. FxPro analysts indicate that the most likely scenario now is a pullback to the $81,000 region.

Ethereum: After losing the $3,000 psychological support, it declined to $2,930, with weekly losses similar to Bitcoin, showing high correlation among major cryptocurrencies.

XRP: Dropped over 5% this week, performing the weakest among the three, falling to $1.87. Its technical support levels face greater challenges.

Market Sentiment Indicators Flash Warning Signals

The crypto fear and greed index has dropped to 16, the lowest in nearly three weeks, reflecting extreme market caution. The index combines multiple dimensions such as volatility, market momentum, social media sentiment, Bitcoin dominance, and Google search trends. A lower reading indicates higher fear. The current score of 16 suggests the market is in a state of extreme panic, with investors generally adopting defensive strategies.

Market forecasts also show more cautious expectations. On the Kalshi platform, most users predict Bitcoin’s year-end price will be below $100,000, with only a 23% chance of surpassing that level. This sharply contrasts with the optimistic outlook a few weeks ago expecting Bitcoin to hit new all-time highs. In just a few weeks, market sentiment has shifted from greed to panic, indicating a rapid collapse in investor confidence.

However, despite the price weakness, institutional inflows into crypto ETFs remain strong, signaling that investors are adopting long-term strategies. This divergence between institutional and retail behavior may be key to understanding the current market. Institutional investors often buy during panic, while retail investors tend to chase rallies and sell at lows.

$81,000 as a Critical Support Level for Bitcoin

From a technical perspective, Bitcoin, Ethereum, and XRP are all testing critical support levels. FxPro analysts suggest that the most probable scenario for Bitcoin is a pullback to the $81,000 region. If selling pressure eases, prices could stabilize in a range. The $81,000 level is not arbitrary but based on multiple technical factors converging.

If Bitcoin falls below $81,000, it could trigger chain reactions, causing Ethereum and XRP to decline further. The next key support for Ethereum is around $2,800, while XRP might test $1.75. Broader indicators suggest the market is entering a deeper correction phase rather than a simple short-term pullback.