Crypto Market Crashes: $2.89 Trillion Lost as Bitcoin Plunges 6.5% in 24 Hours

Market Meltdown: Crypto Loses $300 Billion in Single Day

The cryptocurrency market is experiencing a severe downturn today, with the total market capitalization plummeting 5.8% over the past 24 hours. The once-mighty $3 trillion market cap has evaporated, leaving the crypto space valued at just $2.89 trillion as of Friday morning UTC.

This dramatic decline has sent shockwaves through the entire crypto ecosystem, with 97 out of the top 100 cryptocurrencies posting losses. The total trading volume has surged to $207 billion, indicating massive sell-offs across the board.

Bitcoin Takes a Brutal Hit: $82,389 and Falling

Bitcoin (BTC), the king of cryptocurrencies, has suffered a devastating 6.5% drop, trading at $82,389 at the time of writing. This marks a significant retreat from recent highs and has triggered widespread panic among investors.

Ethereum (ETH) is faring even worse, plummeting 7.9% to $2,721 – the largest percentage drop among the top 10 cryptocurrencies. Binance Coin (BNB) has fallen 6.9% to $840, while even the relatively stable Tron (TRX) has dipped 1.4% to $0.2897.

Market Sentiment Crashes into Extreme Fear Territory

The crypto fear and greed index has tumbled to 28, deep in the “fear” zone and approaching “extreme fear.” This dramatic shift in sentiment reflects growing investor anxiety about the market’s direction and potential further losses.

Behind the Plunge: Liquidity Crisis and Institutional Exodus

Former BitMEX CEO Arthur Hayes has identified a $300 billion contraction in U.S. dollar liquidity as the primary driver behind Bitcoin’s recent pullback. “BTC falling not a surprise given the fall in $ liquidity,” Hayes tweeted, linking the crypto market’s woes to broader macroeconomic forces rather than crypto-specific factors.

The U.S. government’s potential cash balance raises to fund spending in case of a shutdown have contributed to this liquidity crunch, creating a perfect storm for crypto assets.

ETFs See Record Outflows

U.S. spot Bitcoin ETFs experienced their largest single-day outflows since November 2025, with a staggering $817.87 million leaving the market. BlackRock led the exodus with $317.81 million in outflows, followed by Fidelity ($168.05 million) and Grayscale ($156.56 million).

Ethereum ETFs weren’t spared either, posting $155.61 million in outflows, with Fidelity recording the highest negative flows at $59.19 million.

Gold vs. Bitcoin: The Ultimate Showdown

Economist Peter Schiff has pointed out that Bitcoin’s value against gold has fallen to levels not seen since 2017. “Most people who now own Bitcoin would have been better off buying gold or silver instead,” Schiff declared, highlighting Bitcoin’s underperformance compared to traditional safe-haven assets.

Bitcoin is now worth just 15.5 ounces of gold, down 57% from its 2021 high and only 10% above its 2017 peak, despite all the hype and institutional backing.

What’s Next? Critical Support Levels Under Threat

Bitcoin has dipped below the crucial $83,500 level, raising concerns about a potential retest of the November low around $80,000. Technical analysts warn that if BTC falls below $80,000, it could trigger a cascade of liquidations, potentially pushing the price toward $75,000.

Ethereum faces similar pressure, with critical support levels at $2,630, $2,550, and $2,490 under threat. The altcoin market is even more vulnerable, with many smaller cryptocurrencies experiencing double-digit percentage losses.

Institutional Shift: Bitcoin’s Maturing Market

Kraken’s Global Economist Thomas Perfumo notes that as Bitcoin has matured into an institutional asset, the volatility that once attracted retail participants has diminished. This cultural shift has left the market vulnerable to macro factors rather than crypto-specific catalysts.

However, Perfumo suggests this transition isn’t permanent. “Factors such as the stabilization in long-term holder selling and progress on U.S. market-structure legislation could act as catalysts for that shift in flows,” he explains.

The AI Connection: Tech Stocks Drag Crypto Down

VP at Kraken Matt Howells-Barby points to recent AI-related worries as another factor weighing on crypto sentiment. Big Tech companies are investing heavily in AI, but the lack of corresponding earnings has caused investors to reassess their risk appetite across all sectors, including crypto.

Market Winners? Almost None

Among the top 100 cryptocurrencies, only three showed positive price action: Canton (CC) up 8.9%, Figure Heloc (FIGR_HELOC) up 1.3%, and LEO Token (LEO) up 0.3%. The rest of the market is deep in the red, with Pump-fun (PUMP) suffering the largest single-day loss at 10%.

Technical Analysis: Bearish Signals Everywhere

Bitcoin’s trading range has compressed to $82,005-$90,475 over the past week, with the cryptocurrency down 7.7% in seven days and 6.8% over the past month. The recent breakdown below key support levels suggests further downside potential in the near term.

Market Outlook: Brace for More Volatility

With global liquidity remaining constrained and geopolitical tensions rising, the crypto market faces significant headwinds in the near term. The combination of institutional outflows, macro uncertainty, and technical breakdowns suggests that further volatility is likely.

However, crypto veterans note that the market has historically shown resilience, with sharp recoveries often following major corrections. The key question is whether this downturn represents a healthy correction or the beginning of a more prolonged bear market.

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