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Crypto market cap dips $2T from peak as investor fear rises

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Crypto market cap dips $2T from peak as investor fear rises

The crypto market is facing renewed pressure as prices and investor confidence continue to weaken.

Summary

  • The total crypto market cap has fallen from $4.38T to about $2.2T.
  • Heavy liquidations and derivatives unwinds are driving pressure.
  • Analysts warn that volatility may stay high in the near term.

The total cryptocurrency market capitalization has fallen by about $2 trillion from its October 2025 peak of $4.38 trillion, according to data from CoinGecko. As of early February, the market is valued between $2.1 trillion and $2.3 trillion.

At the time of writing, Bitcoin (BTC) was trading close to $65,000 after briefly falling to about $60,000 on Feb. 5. The largest cryptocurrency is now down almost 50% from its peak of $126,080 in October 2025.

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Large liquidations, exchange-traded fund withdrawals, and reduced risk appetite in financial markets have all contributed to the recent decline. This sharp pullback has been matched by a collapse in market sentiment.

The Crypto Fear & Greed Index, compiled by Alternative, fell three points in the past day to 9, its lowest reading since June 2022. The index tracks factors such as volatility, momentum, and social sentiment. A score at this level points to deep fear among traders and long-term investors alike.

Periods like this are often linked to heavy selling in leveraged markets. When prices fall quickly, margin calls force traders to close positions. These forced exits add more pressure and can push prices even lower. As a result, losses tend to spread across major tokens in a short period.

Liquidation pressure and institutional selling

The current sell-off has been one of the most intense since late 2022. Some market trackers estimate that more than $1 trillion in crypto value has been erased over the past month alone.

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Jamie Coutts, a crypto analyst at Real Vision, wrote on X that signs of capitulation are becoming stronger. He noted that Bitcoin’s Implied Volatility Index has climbed to 88.55, close to the level seen during the FTX collapse. At the same time, Coinbase recorded daily trading volume of $3.34 billion, one of the highest in its history.

Coutts also pointed out that Bitcoin’s daily relative strength index has dropped to 15.64, below levels seen during the March 2020 market crash. According to him, this combination of margin calls and forced selling is typical during major downturns. He added that capitulation often unfolds over several days or weeks rather than in a single event.

Institutional activity is adding to the pressure. CryptoQuant contributor Darkfost said in a Feb. 6 report that the Coinbase Premium Gap has turned deeply negative.

This means that Bitcoin is trading at lower prices on Coinbase, a platform that is often used by professional and institutional investors, than on Binance, which has a larger user base of retail investors. Large investors are typically selling more when this gap widens to the downside. 

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The current reading is the weakest seen so far this year, suggesting that institutional demand remains soft. 

Uncertain outlook amid market stress

The wider financial environment is also affecting digital assets. Tighter financial conditions, changing interest rate expectations, and geopolitical concerns have all contributed to a decline in appetite for riskier investments.

Technology stocks, commodities, and cryptocurrencies have all faced renewed selling in recent weeks. Traders are hesitant to take on big positions in this kind of environment. Because there is less liquidity, price fluctuations are more severe and unpredictable. Rapid changes in either direction can be triggered by even minor shifts in data or sentiment.

Some analysts say extreme fear levels can sometimes appear near market bottoms. Past cycles show that strong rebounds have followed periods of deep pessimism. Still, others warn that stabilization may take time, especially if selling from funds and institutions continues.

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Crypto World

Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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