The total cryptocurrency market capitalization has suffered a dramatic decline, with over $1 trillion wiped out in the six weeks following its peak in early October 2025. This sharp, rapid correction follows a significant loss of market momentum and has raised serious concerns about the sector’s immediate trajectory. The flagship cryptocurrency, Bitcoin (BTC), has borne the brunt of the decline, losing approximately 25% of its value since reaching its recent high, falling below the crucial psychological mark of $100,000.
This massive capital withdrawal signals an intense period of deleveraging and risk aversion among institutional and retail investors. Analysts point to the collapse of expectations for a US Federal Reserve rate cut and general macroeconomic uncertainty as the primary triggers, reinforcing the fact that crypto assets are highly correlated with broader market risk. The speed and severity of the correction serve as a stark reminder of the extreme volatility inherent in the digital asset sector.The downturn has also put considerable pressure on major altcoins, with Ethereum (ETH), Solana (SOL), and XRP seeing double-digit percentage drops. While major crypto executives like the CEO of Binance attribute the volatility to macro factors rather than internal collapse, the loss of over a trillion dollars in market value positions the sector for a critical test of key technical and psychological support levels as it enters the end of the year.
