The total cryptocurrency market capitalization has retreated to levels not seen since early November, when Donald Trump’s election victory triggered a significant breakout through a key resistance level.
Bitcoin (BTC) has made a strong recovery, climbing back to nearly $80,000 following a dip below $75,000 late Monday. This rebound sparked a relief rally across major digital assets.
Dogecoin (DOGE), BNB (from Binance’s BNB Chain), XRP, and Cardano’s ADA all rose by as much as 10%, helping to recover some of the losses seen in the past 24 hours. The broad-based CoinDesk 20 index (CD20), which tracks the top 20 cryptocurrencies, added almost 9%.
Overall, the cryptocurrency market cap has fallen back to levels seen in early November of last year, when Trump’s victory sparked a rally that broke through resistance, leading to a significant rise in market value.
In traditional equity markets, rumors of a potential tariff relief drove the S&P 500 up over 7% late Monday, but the gains were quickly erased after the White House dismissed the rumors as “fake news.”
In the cryptocurrency market, futures linked to crypto assets saw over $1.2 billion in liquidations on Monday, as major coins dropped by more than 20% at one point. This set the stage for a bounce as traders closed short positions and reversed their selling, according to CoinDesk.
As the market stabilizes, traders are focusing on Bitcoin’s price movements for clues on dip buying strategies. However, some remain cautious due to the ongoing uncertainty caused by tariff conflicts.
“We are optimistic that investors looking for safe havens will consider buying Bitcoin if it demonstrates relative strength against traditional assets during a potential short-term recovery,” said Jupiter Zheng, partner at HashKey Capital, in a message to CoinDesk on Telegram. “While global markets are experiencing major sell-offs, Bitcoin, although down, has remained relatively stable.”
Alex Kuptsikevich, chief market analyst at FxPro, noted that the market appeared “emotionally oversold” and that while a rebound was underway, the conditions for a full reversal were not yet in place.
“Crypto sentiment has plunged into the extreme fear zone of 23, which is much higher than the levels we’re seeing in equity markets,” he said via email. “This doesn’t mean cryptocurrency investors are more confident. Instead, it indicates that the sell-off is more organized and potentially more dangerous.”
