Dip Buyers' Absence Leaves Crypto Rout to Deepen

Above: Bitcoin at daily intervals.

Cryptocurrency market capitalisation has slumped to $2.5TRN amidst an ongoing deterioration in investor sentiment centred on the U.S. economy and stock market.

"It is dipping below the peaks of early 2024 and late 2021. Previously, a similar decline would complete a corrective pullback, attracting buyers. However, the chances of such an outcome are now lower than in previous years," says Alex Kuptsikevich, chief market analyst at FXPro.

He explains the hesitancy is due to the powerful influence of traditional financial companies via ETFs, which has strengthened the link between the crypto market and stock dynamics.

"The crypto market’s downturn began amid macroeconomic uncertainty caused by the new U.S. tariffs imposed on other nations. Additionally, market participants are concerned about the potential introduction of further trade barriers from the U.S. administration," says Anton Kryshtal, an analyst Coinomist.

According to Ricardo Evangelista, Senior Analyst at ActivTrades, investor concerns are mounting over the US administration’s erratic policies—both in trade and in handling long-standing geopolitical alliances.

"The potential fallout includes a US recession, a global wave of protectionism, and heightened geopolitical instability," he says.

President Donald Trump on Sunday acknowledged the U.S. economy might fall into recession, while recently abandoning a long-held obsession with stock market performance, saying he doesn't watch it anymore.

The "Trump put" of his first term is certainly no longer to equity investors, which is potentially increasing market concerns.

"US President Trump’s comments over the weekend about a potential recession affected sentiment and could limit risk appetite. Trade tensions, fears of a recession, and broader economic concerns have contributed to traders’ caution," says Christopher Tahir, Senior Market Strategist at Exness.

According to CoinShares, global crypto fund investments fell by $876M last week after record outflows of $2.911BN a week earlier.

Investments into Bitcoin fell by $756M and Ethereum by $89M. On the otherside of the ledger, investments into Solana rose by $16 million, XRP by $6M, and Sui by $3M.