26.02.2025 20:52
The cryptocurrency market has been experiencing a significant decline since Donald Trump's inauguration on January 20. While altcoins have been in a downtrend since December 8, 2024, Bitcoin's (BTC) strong performance temporarily masked this situation. On Tuesday, spot Bitcoin ETFs experienced their largest fund outflow in history, while CoinMarketCap's Fear and Greed Index is signaling a definitive bear market with a score of 26.
While many cryptocurrency investors believe that the bear market began in February 2025, a closer examination of the data reveals that altcoins have actually been losing value since December. On the day Donald Trump took office, Bitcoin reached a level of $108,800, breaking its all-time record, while other crypto assets continued the downward trend that had started six weeks prior to that date. This situation once again highlights the complex and multi-layered structure of the crypto market.
Trump, Elected with Crypto Promises, Caused an Unexpected Drop
The decline in the cryptocurrency market appears to be deeper and longer-lasting than most investors anticipated. The market capitalization of altcoins has fallen below $1.2 trillion as of Wednesday morning, down from a peak level of $1.9 trillion reached on December 8, 2024.
This decline represents a loss of more than one-third of the total value of altcoins. On the other hand, Bitcoin's performance has differentiated itself from other crypto assets, reaching an all-time high of around $108,800 on January 20.
Worrying indicators are not limited to prices. CoinMarketCap's Fear and Greed index is hovering at a level of 26, while crypto market sentiment and "Altcoin Season" indices are similarly found at low levels of 27 and 24, respectively.
Market experts indicate that Bitcoin's temporary rise has masked the downward trend in altcoins for a while. While almost no one anticipated such a decline in January, the overall market capitalization of crypto assets was hovering within 3% of its all-time high during Trump's inauguration ceremony.
Negative developments, such as the world's largest crypto scam and the halving of the stock value of Michael Saylor's company, have accelerated the downward trend in the market. These events are seen as a mathematical reminder of the cyclical volatility of the crypto world.