The crypto markets have once again faced a downturn today, with total capitalization plummeting back to $2.8 trillion. This figure mirrors the market’s state back in March 2024, prior to the arrival of the most pro-crypto administration in history in the White House.
On March 13, Chainlink community liaison Zach Rynes described the market as the “most bizarre clown market” he has ever witnessed in crypto.
“We’ve just seen the most bullish catalysts in the history of crypto in a single month, but the spooky macro conditions are suppressing positive market reactions,” he added.
Rynes highlighted a significant shift in the US government’s stance, moving from a position of hostility towards crypto to one that is not just neutral but openly supportive of the industry. Despite this positive shift, however, the markets have witnessed a staggering 26% decline—equivalent to a trillion dollars—since their peak just two months ago.
Bear Market Fears Return
Rynes pointed out several bullish fundamentals that have emerged recently. One key development is the establishment of a strategic Bitcoin reserve by the US, which mitigates the possibility of a ban on cryptocurrencies and stimulates global economies to stockpile for economic supremacy.
Moreover, the impending regulations for stablecoins and decentralized finance (DeFi) are set to empower institutional participation in the industry while simultaneously bolstering the dollar’s status.
Most bizarre clown market I’ve ever seen in crypto
We’ve just seen the most bullish catalysts in the history of crypto in a single month’s time but the spooky macro conditions are suppressing positive market reactions
The U.S. government has shifted from being adamantly… pic.twitter.com/EI3BtWJJDx
— Zach Rynes | CLG (@ChainLinkGod) March 12, 2025
In addition, the consistent emergence of new spot crypto ETF filings is providing access to a larger pool of investors who previously could not participate in the market.
However, challenges remain due to external macroeconomic factors, such as escalating trade wars and heightened probabilities of a US recession, which continue to exert downward pressure on the asset class.
“Trade wars and tariffs are tangential to crypto policy, that’s the short – medium term macro shitshow that’s creating broader market volatility.”
On March 13, blockchain analytics firm Santiment noted dwindling trade volumes, indicating a decrease in trader enthusiasm and signaling potential weakness in market momentum.
“After further market cap declines these past two weeks, trader behavior indicates a mix of exhaustion, hopelessness, and capitulation.”
Crypto Market Outlook
The ongoing downtrend in the crypto market, which began in late January, persisted this week with additional losses.
Although Bitcoin marginally gained over the past 12 hours, reaching approximately $84,000 during early trading in Asia on Thursday, it remains down by more than 8% over the past week.
Ethereum, on the other hand, has been severely impacted, facing significant downturns and failing to reclaim the critical psychological threshold of $2,000 in recent days. Altcoins are also suffering, with many returning to yearly lows this week.
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