Crypto Market Slides Below $3 Trillion as Institutional Selling Weighs on Bitcoin and Ether

The cryptocurrency market extended its pullback on Wednesday, with total market capitalization slipping below the $3 trillion mark for the third time this month, raising concerns about deeper downside risks. The latest decline appears driven less by retail panic and more by shifting institutional sentiment, particularly in large-cap cryptocurrencies with active exchange-traded fund exposure.

Bitcoin fell about 1.5% to trade near $86,580, partially erasing gains from the previous session. Ether also weakened, retreating to around $2,930 after briefly approaching $2,980 overnight. XRP’s recovery stalled near $1.90 as broader market pressure intensified. These assets, which benefited most from strong institutional inflows earlier in the year, are now leading losses as investors reassess risk exposure heading into year-end.

Market analysts point to changing institutional positioning as a key factor. According to FxPro’s Alex Kuptsikevich, major cryptocurrencies are becoming “victims of changing institutional sentiment,” suggesting that portfolio rebalancing rather than widespread capitulation is driving the move. This weakness in crypto stands in contrast to moderate gains across major Asian equity markets, which have been supported by expectations of additional fiscal stimulus from China following weak November economic data.

Macroeconomic factors are also adding pressure. The U.S. dollar index rebounded to 98.30 after recent jobs data showed stronger-than-expected employment growth, even as unemployment rose to 4.6%, its highest level since 2021. A stronger dollar typically weighs on Bitcoin and other dollar-priced assets, contributing to the current risk-off tone.

Investor sentiment has deteriorated sharply, with the crypto fear and greed index falling to 11, firmly in “fear” territory. Several large-cap tokens have broken key technical support levels, increasing the likelihood of further downside. Analysts highlight $81,000 as the next important Bitcoin support, with a deeper retracement potentially targeting the $60,000–$70,000 range if selling accelerates.

Thin liquidity conditions are amplifying price swings as year-end approaches, with traders reducing leverage and exposure. While short-term momentum looks weak, on-chain data shows continued accumulation by corporations and financial firms. Notably, Strategy’s recent purchase of more than 10,600 BTC underscores that selective long-term confidence persists despite near-term volatility.