Crypto markets continued to pull back on Wednesday, with total capitalization dipping below $3 trillion for the third time this month, testing a level that could signal further downside pressure.

The selling was concentrated among large-cap tokens, particularly those with significant ETF exposure, suggesting the move reflects shifts in institutional positioning rather than broad retail capitulation. Bitcoin (BTC) slipped 1.5% to $86,580, partially reversing gains from Tuesday. Ether (ETH) fell to $2,930 from an overnight high near $2,980, while XRP’s recovery stalled around $1.90, according to CoinDesk data. These major tokens, which benefited from institutional inflows earlier this year, are now leading losses as sentiment cools.

“Major coins are increasingly victims of changing institutional sentiment,” said Alex Kuptsikevich, chief market analyst at FxPro, noting that investors are reassessing risk exposure heading into year-end.

Bitcoin’s weak tone contrasted with moderate gains in major Asian equity markets—including the Hang Seng, Shanghai Composite, Kospi, and IDX—which drew support from expectations of Beijing fiscal stimulus following weak November economic data.

Macro conditions are also weighing on crypto. The dollar index recovered to 98.30 from a 2.5-month low of 97.87 after U.S. jobs data showed 64,000 positions added in November—above forecasts—while unemployment rose unexpectedly to 4.6%, its highest since 2021. A stronger dollar typically pressures BTC and other dollar-denominated assets, though gold remained firm above $4,300 per ounce at the time of writing.

Deteriorating sentiment and technical pressures

Market sentiment has deteriorated alongside prices. The crypto Fear & Greed Index fell to 11, its lowest reading in a month, signaling extreme fear. Unlike short-lived pullbacks in February and April, the current decline shows signs of a deeper correction, with several large-cap assets breaching intermediate technical support levels. The next key support zone for BTC sits near $81,000, where November lows coincide with March consolidation levels. A deeper retracement could expose the broader $60,000–$70,000 range, historically significant from prior cycles in 2021 and 2024.

Liquidity remains thin

Liquidity conditions are amplifying price moves. FlowDesk data show declining market depth as year-end approaches, with subdued leverage as traders close positions and reduce exposure. Lower liquidity has intensified volatility, especially during U.S. trading hours, while overall exchange volumes remain historically weak.

On-chain indicators provide a mixed picture. CryptoQuant data suggest the recent BTC rally may have run its course, opening the door for a corrective phase. Meanwhile, Glassnode reports that long-term accumulation continues among corporations and financial firms, extending beyond miners. Strategy’s recent purchase of 10,624 BTC—nearly $1 billion—highlights selective accumulation even amid weakening short-term momentum.