The crypto market cap holds steady at $2.88T after a bullish structure shift, signaling a potential higher low formation ahead. Despite a recent 0.88% dip, the total crypto market cap stays above key fib levels, showing strength after April’s recovery. Sentiment remains bearish, but price structure and volume suggest the market is building a solid base between $2.7T and $3.0T. The total cryptocurrency market cap is showing signs of renewed strength after a major structural shift on the daily timeframe. The market currently sits at $2.88 trillion, down slightly by 0.88% on the day. However, despite the dip, recent price action has turned bullish. A clean break in structure has emerged following April’s recovery. Traders now eye a higher low as the next key development. A purple support zone just below current levels looks promising. If that fails, deeper Fibonacci levels may provide support. Structural Recovery Follows Steep Correction Since November 2024, the crypto market has moved through a well-defined cycle. The trend started near $2.1 trillion and quickly rallied. December brought explosive growth, pushing the market cap above $3.6 trillion, a 71% rise. Mid-December marked the first peak, followed by a minor consolidation. Source: CRG Momentum returned in January 2025, briefly lifting the market near $3.6 trillion again. However, February reversed the trend. A steep March correction dragged the market down 25%, dropping the cap from $3.1 trillion to $2.3 trillion. April marked a turning point. The market formed a rounded bottom near the $2.3 trillion level. Fibonacci retracement zones appeared, showing possible recovery targets. Price eventually rallied near $3 trillion before pulling back slightly. Bulls Watch for Base Before Breakout Current consolidation between $2.7 trillion and $3.0 trillion suggests a new base may be forming. This aligns with broader bullish sentiment despite recent bearish headlines. CRG from MacroCRG notes that sentiment remains near record lows. However, price structure tells a different story. The market now trades above key Fibonacci levels, with volume evenly split between buyers and sellers. This balance hints at an accumulation phase rather than distribution. The purple zone beneath current prices could form the ideal higher low. Moreover, technical traders view dips as opportunities rather than signals of collapse. With a bullish structure in place, a strong move higher seems increasingly likely. Price may need more time to build momentum, but the foundation appears solid.

  • Global liquidity has fallen into negative territory, reflecting tighter policy and reducing capital access across crypto and stock markets.

  • Liquidity contractions frequently signal lower inflows into risk assets like crypto, with investor sentiment shifting toward safer holdings.

  • Alphractal’s data shows that central bank tightening often aligns with market slowdowns, as traders react to reduced monetary support.

Global Liquidity Turns Negative — a trend that often precedes risk-off behavior in financial markets — has resurfaced. This recent change indicates tightened capital conditions that may affect both equity and crypto asset flows.

Liquidity Shift Returns to the Negative Zone

Global central bank liquidity has recorded a fresh 30-day contraction, according to data shared by Alphractal on X. This downturn marks a return to negative territory for the first time in recent weeks.

Historically, such contractions in global liquidity reflect central banks’ tightening stances.Actions of this nature include reducing stimulus levels or increasing interest rates. Tighter monetary conditions mean capital for speculative or high-risk investments (cryptos and equities often falls into this category) is at a premium.

This liquidity change has often served as an early indicator for lower market appetite. When central banks remove support or slow asset purchases, it limits cash flow into risk assets. Investors then adjust their positioning accordingly.

Impact on Crypto and Equity Market Behavior

Global Liquidity Turns Negative — this signal has usually preceded short- to mid-term drawdowns across crypto and equity indices. Investors become cautious as liquidity tightens, limiting capital inflows into decentralized assets like Bitcoin and Ethereum.

This shift reduces risk exposure as markets reprice expectations based on reduced funding conditions. Traders often reallocate from volatile assets into more stable vehicles when central banks scale back liquidity measures.

During periods of negative liquidity shifts, data has shown increased selling pressure across crypto markets. The environment becomes less supportive for growth as interest rate sensitivity rises. Market activity often slows in tandem with liquidity restrictions.

Why Monitoring Liquidity Trends Matters

Alphractal’s tweet emphasized that this liquidity contraction is more than a technical metric — it signals broader macroeconomic trends. Liquidity levels offer insights into market-wide behavior well before price action reflects those changes.

As Global Liquidity Turns Negative again, it provides early signs of how monetary authorities view current economic conditions. Investors closely monitor this trend to assess short-term capital availability and strategize accordingly.

In such an environment, caution often dominates sentiment. Liquidity metrics are one of the key gauges used by seasoned participants to anticipate market direction shifts, especially within crypto cycles.

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