The crypto market is facing renewed pressure as prices and investor confidence continue to weaken.
Summary
- The total crypto market cap has fallen from $4.38T to about $2.2T.
- Heavy liquidations and derivatives unwinds are driving pressure.
- Analysts warn that volatility may stay high in the near term.
The total cryptocurrency market capitalization has fallen by about $2 trillion from its October 2025 peak of $4.38 trillion, according to data from CoinGecko. As of early February, the market is valued between $2.1 trillion and $2.3 trillion.
At the time of writing, Bitcoin (BTC) was trading close to $65,000 after briefly falling to about $60,000 on Feb. 5. The largest cryptocurrency is now down almost 50% from its peak of $126,080 in October 2025.
Large liquidations, exchange-traded fund withdrawals, and reduced risk appetite in financial markets have all contributed to the recent decline. This sharp pullback has been matched by a collapse in market sentiment.
The Crypto Fear & Greed Index, compiled by Alternative, fell three points in the past day to 9, its lowest reading since June 2022. The index tracks factors such as volatility, momentum, and social sentiment. A score at this level points to deep fear among traders and long-term investors alike.
Periods like this are often linked to heavy selling in leveraged markets. When prices fall quickly, margin calls force traders to close positions. These forced exits add more pressure and can push prices even lower. As a result, losses tend to spread across major tokens in a short period.
Liquidation pressure and institutional selling
The current sell-off has been one of the most intense since late 2022. Some market trackers estimate that more than $1 trillion in crypto value has been erased over the past month alone.
Jamie Coutts, a crypto analyst at Real Vision, wrote on X that signs of capitulation are becoming stronger. He noted that Bitcoin’s Implied Volatility Index has climbed to 88.55, close to the level seen during the FTX collapse. At the same time, Coinbase recorded daily trading volume of $3.34 billion, one of the highest in its history.
Coutts also pointed out that Bitcoin’s daily relative strength index has dropped to 15.64, below levels seen during the March 2020 market crash. According to him, this combination of margin calls and forced selling is typical during major downturns. He added that capitulation often unfolds over several days or weeks rather than in a single event.
Institutional activity is adding to the pressure. CryptoQuant contributor Darkfost said in a Feb. 6 report that the Coinbase Premium Gap has turned deeply negative.
This means that Bitcoin is trading at lower prices on Coinbase, a platform that is often used by professional and institutional investors, than on Binance, which has a larger user base of retail investors. Large investors are typically selling more when this gap widens to the downside.
The current reading is the weakest seen so far this year, suggesting that institutional demand remains soft.
Uncertain outlook amid market stress
The wider financial environment is also affecting digital assets. Tighter financial conditions, changing interest rate expectations, and geopolitical concerns have all contributed to a decline in appetite for riskier investments.
Technology stocks, commodities, and cryptocurrencies have all faced renewed selling in recent weeks. Traders are hesitant to take on big positions in this kind of environment. Because there is less liquidity, price fluctuations are more severe and unpredictable. Rapid changes in either direction can be triggered by even minor shifts in data or sentiment.
Some analysts say extreme fear levels can sometimes appear near market bottoms. Past cycles show that strong rebounds have followed periods of deep pessimism. Still, others warn that stabilization may take time, especially if selling from funds and institutions continues.
