Crypto markets steadied on Wednesday following a turbulent start to the week, tracking a tentative improvement in broader risk sentiment even as positioning remained cautious.
Total crypto market capitalization rose about 1.7% over the past 24 hours to roughly $2.65 trillion, according to CoinMarketCap. The modest rebound followed sharp swings earlier in the week, when thin liquidity and heavy liquidations drove prices sharply lower before dip buyers stepped in.
Bitcoin traded above $78,000 during Asian and early European hours, about 5% above Monday’s lows. However, the recovery stalled near technical resistance levels that have capped upside since early February, reinforcing skepticism around the durability of the move.
That choppy price action has kept short-term sentiment under pressure, with traders struggling to push rebounds beyond narrow ranges.
Altcoins delivered a mixed performance. BNB led gains after renewed public support from Binance founder Changpeng Zhao, while dogecoin advanced following fresh mentions by Elon Musk. Most other major tokens posted modest recoveries but remained well below levels seen earlier in the year.
The cautious tone in crypto mirrored broader markets. Asian equities pared earlier losses after U.S. tech stocks slid overnight, as investors rotated toward more economically sensitive sectors such as financials and industrials. The pullback in U.S. equities was driven by concerns that rapid advances in artificial intelligence could disrupt traditional software-as-a-service business models.
Commodities added another layer of uncertainty. Oil prices rose after the U.S. Navy shot down an Iranian drone headed toward an aircraft carrier in the Arabian Sea, injecting fresh 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 underscore defensive positioning across crypto markets. CoinShares reported $1.7 billion in weekly outflows from global crypto investment products, marking a second consecutive week of heavy redemptions. Bitcoin funds accounted for the majority of withdrawals, followed by ether and other major tokens.
On-chain indicators tell a similarly cautious story. Long-term bitcoin holders have slipped into unrealized losses, a condition CryptoQuant associates with “extremely bearish” phases that can sometimes precede local market bottoms. Options markets, meanwhile, show early signs that traders are positioning for a potential stabilization.
Corporate crypto exposure also remains under scrutiny. Ether’s recent decline has deepened unrealized losses at major holders, with BitMine’s paper losses nearing $7 billion, while some institutional investors have begun trimming exposure. Others, including Strategy, have continued to add bitcoin despite the volatility.
For now, the recovery appears fragile, with traders focused on whether broader risk markets can provide enough support to turn a tentative bounce into a more durable trend.
