Crypto markets experienced a decline on Sunday, reflecting a broader pullback in risk assets as the year comes to a close. Investors are adopting a cautious stance amid concerns over technology valuations, waning momentum in U.S. equities, and mixed signals from the Federal Reserve. Bitcoin dipped approximately 0.5%, trading around $89,600 while ether saw a slight decline to about $3,120. Other major cryptocurrencies also faced losses, with XRP, Solana, and Dogecoin each falling by up to 2%.
This downturn followed a modest rebound in U.S. equity-index futures after the prior week’s tech-led selloff, sparked by renewed scrutiny over substantial artificial intelligence spending and questions regarding earnings sustainability. Despite a rise of about 0.2% in futures for the S&P 500 and Nasdaq 100 during Asian trading hours on Monday, risk appetite remains fragile as investors reassess whether the elevated valuations in technology stocks are justifiable going into 2026.
Amid these uncertainties, crypto markets have struggled to regain momentum after a sharp decline in October. Notably, trading volumes have thinned in recent sessions, which has amplified price movements and reinforced a defensive tone within the market. Jeff Mei, chief operating officer at crypto exchange BTSE, commented that investors are currently hesitant to invest in cryptocurrencies due to the significant dip in October, concerns about an overvalued U.S. stock market, and mixed signals from the Fed. However, he pointed out that inflows into Bitcoin ETFs remain net positive and that the Fed has begun purchasing back securities, adding liquidity that could eventually benefit stocks and cryptocurrencies.
Year-end positioning is likely contributing to the current market weakness, as traders are taking profits ahead of the New Year and will reconsider their crypto positions in early 2026, according to Mei.
Experts have warned that thin liquidity conditions could exaggerate future downside moves. Augustine Fan, head of insights at SignalPlus, stated that the crypto sell-off is a continuation of the negative trends observed on Friday. He indicated that major cryptocurrencies are likely to continue leading downward trends with today’s market behavior. Fan advised caution against over-analyzing short-term price fluctuations, noting that despite daily variances, the overall sentiment remains deeply negative, suggesting a potential for softer prices as the year concludes.
Despite these challenges, there remains hope that U.S.-listed bitcoin exchange-traded funds and ongoing liquidity support from central banks could provide a more favorable foundation once the markets resume full operation in early 2026.
