Cryptocurrencies extended their decline over the past 24 hours, with Bitcoin recording its largest single-day drop since March. The overall crypto market capitalization has now slipped below $3 trillion, a sharp retreat from the all-time high of $4.4 trillion reached earlier this year, signaling a significant pullback in investor sentiment.

Analysts observed clear signs of capital moving away from digital assets. Over the last day, more than $16 million worth of Bitcoin long positions were liquidated, while total liquidations across exchanges surged to roughly $400 million. Futures volumes and open interest have also declined, leading traders to note that “money seems to be rotating out… and not staying in crypto.”

The selloff resumed in December amid broader weakness in financial markets. Digital asset-linked stocks in Asia also tumbled after the People’s Bank of China issued warnings about illegal activities involving digital currencies, triggering selling pressure across regional exchanges.

Investors are also monitoring the Bank of Japan, where rising bond yields—at 15-year highs—are fueling caution. Any shift in Japanese interest rates could affect global liquidity and add further pressure to speculative assets like cryptocurrencies.

Despite the downturn, leveraged positions remain substantial, raising the risk of further declines. Some crypto futures markets still show leverage levels as high as 200 times, while estimated outstanding leverage across Bitcoin products nears $787 billion. Exchange-traded products hold an additional $135 billion in open positions. Analysts warn that if these leveraged trades unwind, the fall “could be even deeper.”

Major cryptocurrencies have posted steep losses over the past month. Bitcoin, Ether, and Polygon are down 20–30%, while other top tokens such as Cardano, Solana, and Binance Coin have fallen 13–30%. Weekly and year-to-date returns have turned negative for many large-cap digital assets.