The global cryptocurrency market experienced a decline on Wednesday, marking a fifth day of losses and dragging the market cap down by 0.84% over the last 24 hours, according to TradingView. The overall market capitalization now hovers around $2.98 trillion, significantly lower than its recent peak of $3.34 trillion. This downward trend is reflected in the chart below, which shows the market trending beneath its 30-day SMA and Heikin Ashi candles exhibiting weak momentum and narrow-bodied consolidation—signaling continued seller dominance but potentially nearing exhaustion. While this decline could be attributed to several factors, regulatory pressure continues to weigh on sentiment. 7.8 million users in South Africa are now operating outside formal regulatory oversight, adding to the uncertainty surrounding crypto assets’ future, while recent scrutiny by the SEC over Coinbase and other industry figures adds another layer of complexity. These developments have prompted caution from institutional investors who prefer compliant exposure via ETFs or regulated custodians. Altcoins, already known for their high volatility, are particularly vulnerable as liquidity thins out and speculative positions unwind. The market’s correction is also being fueled by the unwinding of leveraged positions in the derivatives market. Open interest fell 2.9% to $781 billion, suggesting traders have been reducing risky bets. Perpetual funding rates collapsed 4,804%, reaching near-flat at +0.00186%. This signals a waning bullish sentiment and reduced risk appetite among investors. Bitcoin liquidations dropped by 87%, settling at just $2.21 million, indicating most of the excessive leverage has been cleared out, which could potentially lead to volatility reduction in the near term. However, this is also a signal that confidence among traders has waned as they anticipate further market movement. From a technical standpoint, the chart paints a bearish picture. The total market cap has broken below both the 30-day SMA (3.34T) and the 50% Fibonacci retracement, confirming a mid-term downtrend. Current price action near $2.98T sits just above the 78.6% retracement zone at $2.75T – this level serves as the last significant support before any further decline. The widening of Bollinger Bands reflects heightened volatility, while the RSI(14) has dipped to 25.9, indicating oversold conditions. This could spark a short-term relief rally, but a clear reversal candle on Heikin Ashi suggests it’s premature to call a bottom just yet. What’s next for the market? The next 48 hours will be crucial as key events such as Fed liquidity data release and Bitcoin reaching its historical $85K level could potentially shift market direction. If the Fed reveals stable liquidity levels, crypto assets like Bitcoin might find support. Conversely, a significant rebound above the $85K mark in Bitcoin could restore investor confidence and lift altcoins. While this correction continues, on-chain data from Santiment suggests whales are quietly accumulating during the dip, even as retail traders sell off at a frantic pace—a dynamic often signaling potential reversal but timing it requires confirmation, ideally through bullish engulfing candles on the total market cap chart or a clear reclaim of the $3.1T pivot point. The crypto market’s present weakness can be attributed to a combination of regulatory anxieties, leveraged position resets, and technical breakdowns. The good news is that the market appears to be entering deeply oversold territory, and with leverage gone, volatility may soon compress into a potential recovery setup. If Bitcoin stabilizes above $85K and total market cap reclaims the $3.1T–$3.2T range, a short-term relief rally could follow. Until then, expect choppy sideways action and cautious trading from investors who have witnessed one of the sharpest derivatives cooldown in recent months.