Crypto market under pressure: Bitcoin, altcoins tank up to 7% as FCA signals tighter rules

Crypto market continued to remain under pressure on Tuesday, extending its freefall. The selloff in the global AI-led counters and regulation buzz on the digital token market has been denting the sentiments. Top-10 crypto tokens cracked up to 5-7 per cent in the last 24-hours, according to the data.

According to Reuters, British regulator the Financial Conduct Authority (FCA) launched a wide-ranging consultation on a range of proposed rules for the crypto industry on Tuesday, a day after the government said the industry would be regulated from October 2027.

According to the data from Coinmarketcap Bitcoin, the biggest crypto token tumbled 5.2 per cent in the last 24-hours to $85,304.08 on Tuesday, before making a marginal recovery. Bitcoin's trading volume was down 1.35 per cent as Bitcoin's worth $44.55 billion exchanged hands during the reported period. Bitcoin's total mcap stood at $1.8 trillion.

Bitcoin has tumbled nearly 33 per cent from its all-time high at $126,198.07 hit less than 10 weeks. However, Bitcoin has zoomed 17,66,68,390.6 per cent or 17,66,683.91 times from its all-time low at $0.04865 in 15 years. This jaw dropping return has turned an investment of Rs 1,000 into Rs 176.66 crore.

The crypto market is consolidating, but the broader outlook remains constructive. Institutional confidence is evident as Strategy added 10,645 BTC to its treasury, signalling continued accumulation, said Akshat Siddhant, Lead Quant Analyst at Mudrex. "Bitcoin must defend the $84,000 support zone to prevent further downside. A sustained move above $92,700 would confirm a trend reversal and put Bitcoin back on a bullish path."

The FCA said on Tuesday that its rules would cover listings for crypto assets, measures to stop insider trading and manipulation, standards for crypto trading platforms and rules for brokers, The FCA set out its proposals alongside research that shows that the proportion of UK adults holding crypto has fallen by a third. The defensive mood kept risk assets under pressure, said the agency.

"Bitcoin’s slide below $86,000 reflects a clear imbalance in market participation rather than panic selling. Short-term holders are now selling at a loss, Altcoins are bearing the brunt of this environment. Most majors are underperforming Bitcoin, with sharper drawdowns driven by higher beta, heavier leverage and weaker structural demand, says Vikram Subburaj, CEO at Giottus.

"Macro conditions are amplifying this pressure. Risk appetite has softened as traders reassess the pace of future rate cuts, digest a more cautious Fed outlook, and position ahead of key US data. Liquidity has tightened, leverage has built up into the move, and the subsequent liquidations have reinforced downside momentum without tipping into disorder," he adds.

Among tokens of the top-10 list, Ethereum was down 7 per cent from its day's high, while BNB, XRP, Solana, Tron, Dogecoin and Cardano also fell in tandem, cracking 5-6 per cent each. From the altcoin space, Midnight, Aster, Ondo, Merlin Chain and Celestia crashed 10-15 per cent each in the last 24-hours.

Amid the latest hammering, the total market capitalization of the crypto market was seen at $2.93 trillion, falling more than 4.2 per cent in the last 24-hours. However, Crypto volumes soared nearly 21 per cent as tokens worth $117.6 billion exchanged hands, with Bitcoin's dominance holding at 58.6 per cent. Fear and Greed Index stood at 21-level, signaling sentiments of fear.

The crypto market remains at a pivotal stage, led by Bitcoin trading below major resistance and keeping sentiment cautious, said Sathvik Vishwanath, Co-founder and CEO at Unocoin. "Overall, volatility stays elevated, and Bitcoin’s next decisive move will likely define direction for the entire crypto market."