The cryptocurrency market has faced a significant downturn, with the total market capitalization plummeting by 5.9% to $3.64 trillion, marking its lowest point since July 2025. This sell-off has been largely attributed to a “flight to safety” prompted by rising concerns over the stability of U.S. regional banks.
In the wake of Bitcoin showing renewed signs of weakness, major altcoins also succumbed to selling pressure, with BNB recording the steepest decline among them. Bitcoin fell by 5.6% within a 24-hour period, reaching an intraday low of $104,853, which furthered the downward trend across the entire crypto market.
Experts indicate that the initial panic emerged from traditional financial sectors, chiefly due to unsettling reports concerning loan portfolios at regional lenders such as Zions Bancorporation and Western Alliance. This led to a marked sell-off in bank stocks, contributing to a broader risk-averse sentiment that affected various asset classes, including cryptocurrencies. Derek Lim, head of research at the market-making firm Caladan, remarked, “As concerns spread through the financial sector, risk appetite weakened pretty severely across all markets.” This sentiment naturally translated into a sell-off in crypto markets as traders sought safer investment avenues.
Altcoins, already fragile following a recent flash crash, faced notable corrections, with Ethereum dropping by 7.4% in the same timeframe. Other significant cryptocurrencies like XRP, Solana, Tron, Dogecoin, and Cardano recorded losses ranging from 4% to 9%, while BNB experienced a significant decline of 12.3%.
The cascading effects of this market sell-off resulted in considerable liquidations totaling $1.09 billion, with Bitcoin and Ethereum traders responsible for more than 55% of this figure, according to CoinGlass data.
Despite these alarming trends originating from traditional finance, Lim holds an optimistic view for the long-term prospects of the crypto markets, identifying a “bullish market structure.” His outlook finds some backing in market sentiment, as users on the prediction market Myriad indicated a 66% chance that Bitcoin would finish October with more positive movements than Ethereum, implying hopes for a potential recovery.
However, short-term trader sentiment remains bearish. Current market speculation shows a significant increase in the probability of Bitcoin falling to $100,000 rather than rising to $120,000, which surged to 68% on Friday morning as uncertainty looms over the market’s direction.
