The total cryptocurrency market capitalization has fallen below the $3 trillion threshold, facing renewed selling pressure as broader global market concerns and a strengthening Japanese yen trigger a risk-off environment. According to data from Coinglass, the market saw over $670 million in liquidations in the last 24 hours, with over 85% of those being long liquidations, indicating forced selling from leveraged bullish positions.
The decline is partly attributed to fears of a yen carry trade unwind, where investors borrow in low-yielding currencies like the yen to invest in higher-yielding, riskier assets like cryptocurrencies. The yen's rise has prompted a flight to safety, benefiting traditional safe-havens like gold and silver while pressuring crypto assets.
Despite the sell-off, on-chain metrics suggest the market may be undervalued. Blockchain analytics firm Santiment reported that the 30-day Market Value to Realized Value (MVRV) metric for major altcoins like Ethereum (ETH), XRP (XRP), Chainlink (LINK), and Cardano (ADA) is currently in negative territory, ranging from -5% to -10%. A negative MVRV indicates the average trader is holding at a loss, which historically can signal a potential buying opportunity as selling pressure from profit-taking diminishes.
For Bitcoin, data from 10x Research shows its daily stochastic indicators are at extremely low levels of 15-16%, suggesting the asset is in deeply oversold territory. However, Bitcoin has been in a downtrend since peaking above $125,000 in mid-2025.
The backdrop for this crypto volatility includes growing warnings of fatigue in the global equity rally. Veterans from firms like Goldman Sachs, BCA Research, and Schwab warn that markets, after a 20.6% gain in 2025 for the MSCI All Country World Index and over nine months without a major correction, are "on borrowed time." Analysts cite stretched valuations, frothy sentiment, and geopolitical tensions as potential catalysts for a broader market pullback, which could further impact correlated risk assets like cryptocurrencies.
Some analysts point to a potential rotation from gold into Bitcoin. With gold prices recently surpassing $5,000, the BTC-to-gold ratio is at a historical outlier, suggesting a major imbalance. For equilibrium to return, capital may need to rotate from gold back into Bitcoin.
