Crypto prices steadied on Wednesday after a volatile start to the week, tracking a tentative improvement in broader risk sentiment even as traders remained cautious about near-term direction.
Total crypto market capitalization rose about 1.7% over the past 24 hours to roughly $2.65 trillion, according to CoinMarketCap data. The rebound followed sharp swings earlier in the week, when thin liquidity and heavy liquidations pushed prices sharply lower before buyers stepped in.
Bitcoin traded above $78,000 during Asian and early European hours, about 5% higher than Monday’s lows, though gains stalled near resistance levels that have capped upside since early February.
The choppy price action has reinforced bearish sentiment among short-term traders, with the market struggling to extend rebounds beyond narrow ranges.
Altcoins showed mixed performance. BNB led gains, helped by renewed support from Binance founder Changpeng Zhao, while dogecoin also advanced after fresh mentions by Elon Musk. Elsewhere, most major tokens posted modest recoveries but remained well below levels seen earlier this year.
The cautious tone in crypto mirrored broader markets. Asian stocks pared earlier losses after U.S. tech shares slid overnight, with investors rotating toward more economically sensitive sectors such as financials and industrials.
The pullback in U.S. equities was driven by concerns that rapid advances in artificial intelligence could undermine traditional software-as-a-service business models.
In commodities, oil prices rose after the U.S. Navy shot down an Iranian drone headed toward an aircraft carrier in the Arabian Sea, adding a geopolitical layer to markets already on edge. Gold rebounded above $5,000 an ounce on dip buying, while the yen weakened as traders positioned ahead of Japan’s election this weekend.
Flows data continued to paint a cautious picture for crypto.
CoinShares reported global crypto investment products saw $1.7 billion in outflows last week, marking the second consecutive week of heavy redemptions. Bitcoin funds accounted for the bulk of withdrawals, followed by ether and other major tokens.
Meanwhile, onchain indicators suggest positioning is becoming increasingly defensive. Long-term bitcoin holders have slipped into unrealized losses, a condition CryptoQuant associates with “extremely bearish” phases that can precede local bottoms.
Options markets also show early signs of traders positioning for a potential stabilization.
Corporate crypto exposure remained under scrutiny. Ether’s slide has pushed unrealized losses at major holders higher, with BitMine’s paper losses nearing $7 billion, while some institutional investors have begun trimming positions. Others, such as Strategy, continue to accumulate bitcoin despite the volatility.
For now, crypto’s rebound looks fragile, with traders watching whether broader risk markets can provide enough support to turn a shaky bounce into something more durable.