Crypto markets stabilized midweek after a turbulent start, drawing limited support from an improvement in global risk sentiment even as traders remained cautious about the near-term outlook.
Total market capitalization rose roughly 1.7% over the past 24 hours to about $2.65 trillion, according to CoinMarketCap. The pause followed sharp price swings earlier in the week, when thin liquidity and heavy liquidations pushed digital assets sharply lower before bargain hunters stepped in.
Bitcoin traded above $78,000 during Asian and early European hours, roughly 5% above Monday’s lows. The recovery, however, faded near resistance levels that have capped gains since early February, reinforcing doubts about whether the move has staying power.
The choppy action has kept sentiment defensive, with market participants struggling to push rebounds beyond tight ranges.
Altcoin performance was mixed. BNB led gains after renewed public backing from Binance founder Changpeng Zhao, while dogecoin advanced following fresh comments from Elon Musk. Most other major tokens posted modest recoveries but remained well below their early-year highs.
Caution in crypto echoed across broader markets. Asian equities trimmed earlier losses after U.S. tech stocks slid overnight, as investors rotated into more economically sensitive sectors such as financials and industrials. The weakness in U.S. stocks was driven by concerns that rapid advances in artificial intelligence could disrupt traditional software-as-a-service business models.
Commodities added to market uncertainty. Oil prices climbed after the U.S. Navy shot down an Iranian drone headed toward an aircraft carrier in the Arabian Sea, injecting geopolitical risk. Gold rebounded above $5,000 an ounce on dip buying, while the yen weakened as traders positioned ahead of Japan’s election later this week.
Flows data continued to signal caution. CoinShares reported $1.7 billion in outflows from global crypto investment products last week, marking a second consecutive week of heavy redemptions. Bitcoin products accounted for most of the withdrawals, followed by ether and other major tokens.
On-chain metrics also suggest increasingly defensive positioning. Long-term bitcoin holders have slipped into unrealized losses, a condition CryptoQuant links to “extremely bearish” phases that can sometimes precede local bottoms. Options markets, meanwhile, show early signs of traders positioning for a period of stabilization.
Corporate exposure to crypto remains under scrutiny. Ether’s decline has deepened unrealized losses at major holders, with BitMine’s paper losses nearing $7 billion, while some institutions have begun trimming exposure. Others, including Strategy, have continued to add bitcoin despite the volatility.
For now, the rebound appears fragile, with traders watching whether broader risk assets can provide enough support to turn a tentative stabilization into a more durable recovery.
