Nearly half a trillion dollars has been erased from the cryptocurrency market in under a week as a Bitcoin-led selloff gathered pace. The total market capitalisation of cryptocurrencies has dropped by $467.6 billion since January 29, according to data from CoinGecko.

Bitcoin rebounded 1.31% to $76,681.72 on Wednesday. The largest cryptocurrency plunged to a 15-month low of $72,877 on Tuesday — a level last seen during US President Donald Trump’s re-election in early November 2024, when expectations of a more crypto-friendly policy environment had been high.

Bitcoin is down 13% so far this year and has fallen 39% from its October 6 peak of over $126,000.

What’s behind the crypto slump?

A Bloomberg report suggests that the losses come after a turbulent week in global markets marked by sharp fluctuations in gold and silver prices. Although precious metals saw buying interest on Tuesday following recent declines, cryptocurrencies remained under pressure. Bitcoin slipped as escalating tensions between the US and Iran drove investors toward traditional safe-haven assets.

According to market experts, currency movements and interest rate differentials are quietly influencing market behaviour, affecting leverage, stablecoin flows, and overall sentiment.

Avinash Shekhar, Co-Founder&CEO, Pi42, believes that Bitcoin’s brief move below the $73,000 mark, its lowest level since November 2024, reflects heavy selling pressure as markets react to sustained uncertainty.

“While selling activity has intensified over the past 48 hours, the decline does not appear driven by a single catalyst but rather a combination of positioning resets and broader market nervousness,” Shekhar said.

Nischal Shetty, Founder, WazirX, said that global macro developments highlighted that liquidity conditions continue to shape short-term movements in crypto markets.

With parts of the world still leaning toward tighter monetary conditions, capital remains selective and cautious, and this has kept crypto closely aligned with broader risk assets, as participants react more to macro signals than to crypto-specific news, according to Shetty.

Even small macro changes are translating into sharper price reactions due to relatively thin liquidity, he added.

Crypto market outlook in near term

Shekhar added that liquidation pressure in the crypto market remains a near-term overhang, yet prices are still holding above longer-term structural supports.

“If this zone stabilises, the market may look to consolidate before attempting a recovery, though volatility is likely to persist until clearer macro signals emerge,” he said.

Meanwhile, Shetty of WazirX highlighted that there is a visible shift in focus toward sustainable participation in crypto, including interest in yield- and infrastructure-driven use cases.

“While prices remain range-bound in the near term, the market continues to mature beneath the surface, responding, adapting, and building through changing global conditions,” Shetty said.

On the technical outlook, Coinswitch markets desk said that from a technical perspective, $73K continues to act as key downside support, while a sustained reclaim of the $77.5K–78K resistance zone is required to meaningfully improve the short-term trend and restore bullish momentum.

(With inputs from Bloomberg)

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