The crypto market has not fully recovered since the bear market began after the largest liquidation event in its history on 10 October 2025. More than $19 billion was wiped out that day, setting the stage for a period of sharp swings across digital assets.

Since then, the market has moved through repeated highs and lows, raising questions about whether bullish or bearish forces are currently dominant. The latest turning point came after Bitcoin [BTC] cleared the $65,000 resistance level and several altcoins reached local highs. For a broader bull run to take shape, traders typically look for sustained gains across market capitalization, sentiment, altcoin participation, and fresh liquidity rather than isolated rallies in major assets.

Market capitalization falls by $85 billion

The possibility of deeper market losses is closely linked to total crypto market capitalization, which has declined by roughly $85 billion since 21 July.

The drop may reflect bearish positioning, profit-taking, or a combination of both. It also came shortly after the market reached a fresh high, suggesting that some investors may have chosen to lock in gains. Because total capitalization captures the combined value of listed crypto assets, a decline of this size indicates that weakness was not limited to a single token or sector.

At the time of writing, the Fear and Greed Index appeared to reflect this shift in positioning. The index showed a reading of 35, placing investors in the “fear” zone and indicating caution following concerns about another liquidation event.

That reading suggested that a significant amount of capital remained on the sidelines, even as some accumulation continued quietly.

Altcoin indicators show a divergence

One notable market dynamic suggests that investors may be waiting for conditions to stabilize rather than fully exiting the market. The Altcoin Season Index, which tracks whether altcoins are leaning toward a bull run or bear-market dominance, was moving higher at press time.

This occurred even as altcoin market capitalization fell over the same period.

On 23 July, the Altcoin Season Index stood at 51, while altcoin market capitalization was $923.67 billion. By 25 July, the index had risen to 53, while altcoin capitalization had fallen to $900.46 billion.

The divergence pointed to continued interest in altcoins despite the decline in market value. It also showed why the market picture remained mixed: relative altcoin strength can improve even when the total value of altcoin holdings is falling, especially if losses are uneven across assets.

Broader crypto market sentiment also softened. The latest reading came in at 1.78, down from an all-time high of 3.23 recorded on 22 July. This indicated that investors remained broadly bullish, although their optimism had weakened compared with just a few days earlier.

Stablecoin supply remains nearly flat

Stablecoin supply remains a key measure of whether investors are preparing to re-enter the market. In crypto markets, stablecoins are commonly used as trading liquidity, so rising supply can indicate that more capital is available for deployment, while flat supply can point to limited new buying power.

Over the previous 24 hours, stablecoin inflows into the market were minimal, with total supply remaining close to flat. Over the past week, a slight increase added roughly $824.5 million to the market.

However, that amount was small compared with the outflows the market absorbed during the same week. The article noted that, without a larger inflow likely above the $1 billion mark, market activity would likely remain muted.

Overall, the crypto market has shed roughly $85 billion since 21 July as investors took profits and positioned cautiously after the earlier liquidation event. The Altcoin Season Index rose from 51 to 53, but stablecoin supply remained nearly unchanged, suggesting that a broad return of capital had not yet taken place.