Has the crypto market passed peak capitulation as Bitcoin losses shrink?

The crypto market is showing early signs of stabilization after months of heavy selling, though the outlook remains uncertain.

With daily trading volume of about $121 billion, the global crypto market capitalization is close to $2.51 trillion, up roughly 2.5% over the previous day. Bitcoin (BTC) holds roughly 57% of the market, while Ethereum (ETH) accounts for about 10%.

Investor sentiment remains weak. The Crypto Fear & Greed Index has stayed in extreme fear, with readings between 14 and 19 in early March. Such levels often appear when markets are under pressure but can also precede sharp swings.

Bitcoin has just climbed above $71,000, helping push the market slightly higher. Some altcoins moved strongly as well. Flow posted gains of more than 36%. Even with the rebound, Bitcoin still trades about 42% below its all-time high.

Market losses begin to ease

A March 10 report from CryptoQuant analyst Darkfost shows that realized losses in the Bitcoin market are starting to slow after a period of capitulation.

Recent data shows $611 million in realized losses compared with $346 million in realized profit, leaving the market with a net weekly loss of about $264 million. Losses still dominate trading, but the gap has narrowed.

The situation looked very different a month ago. On Feb. 7, weekly losses were close to $2 billion as Bitcoin briefly fell below $60,000.

Short-term holders remain the most active participants. Their share of the Bitcoin supply has grown to about 22%, compared with 12% in early 2023. That increase suggests newer investors are still entering the market despite recent volatility.

Some signs of consolidation are also appearing. Analysts say investors have started holding or accumulating again as prices stabilize.

On Binance futures markets, Bitcoin trading volume has also moved ahead of altcoin volume. Similar shifts in the past often appeared near broader market bottoms.

Macro pressure still clouds outlook

The short-term outlook remains mixed. Liquidity in global markets is tightening, the U.S. dollar has strengthened, and bond yields are rising. These factors often weigh on risk assets, including crypto.

Because of that, Bitcoin may continue trading in a $60,000 to $70,000 range for now. Following the recent surge, short-term indicators have also moved higher, which may encourage profit-taking.

Future economic data could increase volatility. CPI reports and other inflation statistics may have an impact on interest rate expectations. 

Despite the decline, some investors continue to see value. Pantera Capital’s Dan Morehead recently pointed out that cryptocurrency prices are significantly below long-term trend levels.

Other institutions share cautious optimism. Coinbase Institutional has pointed to improving regulation and deeper financial integration as supportive factors, while analysts at Bybit say options markets still price a small chance of Bitcoin reaching $150,000 this year.

For now, the market appears to be moving away from the most intense phase of selling. Whether the recovery continues will depend on Bitcoin’s ability to hold momentum in the weeks ahead.