Why Are 75 of the Top 100 Cryptos Trading Below Key Moving Averages?

As of mid-December 2025, three-quarters of the largest cryptocurrencies by market capitalization are trading below their 50-day and 200-day moving averages, signaling widespread weakness in the crypto market. This contrasts sharply with traditional equities, where less than a third of Nasdaq-listed stocks share this technical vulnerability, underscoring divergent market dynamics between crypto assets and established stocks.

What happened

On December 16, 2025, data showed that 75 out of the top 100 cryptocurrencies were trading below both their 50-day and 200-day moving averages. These moving averages are widely recognized technical indicators used to gauge market trends and investor sentiment, with prices below these levels generally interpreted as bearish signals. In comparison, only 29% of Nasdaq-listed stocks were trading below these key averages on the same date, indicating relative strength in traditional equities.

This marked decline in crypto prices coincides with a period of heightened regulatory scrutiny, global macroeconomic uncertainty, and tighter monetary policies, factors reported by Bloomberg as exerting pressure on the crypto market. Meanwhile, equities have demonstrated resilience, buoyed by stronger corporate earnings and a more established regulatory environment, according to Reuters.

Industry analysis from CoinDesk and Bloomberg highlights that the pervasive trading below moving averages in cryptocurrencies reflects a broad bearish sentiment and may point to structural vulnerabilities such as liquidity constraints, regulatory risks, and the unwinding of speculative positions. The breadth of the decline across both short-term (50-day) and long-term (200-day) averages suggests the possibility of a sustained downtrend rather than a temporary correction.

Further, comparative observations note that cryptocurrencies exhibit higher volatility and risk sensitivity than equities, reinforcing the notion that crypto assets respond more sharply to market shocks and shifts in investor sentiment.

Why this matters

The widespread breach of key moving averages among top cryptocurrencies has several implications for market participants and the broader financial ecosystem. First, it signals a pervasive negative market sentiment within the crypto sector, which may exacerbate liquidity challenges and heighten risk aversion among investors. This scenario can lead to a feedback loop where falling prices trigger further selling, deepening the downtrend.

Second, the divergence between crypto and equities underlines fundamental differences in market structure, investor base, and regulatory frameworks. While equities benefit from established oversight and generally more predictable earnings, cryptocurrencies remain exposed to regulatory uncertainties and speculative trading dynamics. This disparity may influence portfolio allocation decisions, potentially prompting investors to rebalance away from crypto assets toward more stable traditional investments.

Third, the technical signals from moving averages, widely followed by traders and algorithmic strategies, could reinforce bearish momentum in crypto markets. Sustained trading below these averages often leads to reduced confidence and can impact the willingness of institutional participants to maintain or increase exposure.

Finally, the condition of the crypto market as reflected in these indicators may have broader policy and market structure implications, including the need for clearer regulatory frameworks and improved market infrastructure to support liquidity and investor protection.

What remains unclear

Despite the clear technical picture, several important questions remain unanswered. The available data does not clarify the extent to which the decline below moving averages is driven by fundamental developments—such as specific regulatory actions or network-level changes—versus technical selling pressure alone.

Additionally, the role of market microstructure differences between crypto and equities, including liquidity profiles, participant composition, and leverage use, in shaping this divergence is not fully understood. Information on trading volumes, order book depth, and the behavior of different investor types in crypto markets is lacking, limiting insight into the mechanics behind price movements.

The influence and positioning of institutional investors in the crypto downtrend remain ambiguous, as official disclosures from major crypto funds or ETF issuers are not publicly available. This gap makes it difficult to assess how institutional engagement compares to retail investor activity in equities.

Moreover, there is no direct evidence establishing causality between regulatory developments and the breaches of moving averages; the observed correlation does not confirm that regulatory pressure is the primary driver. Similarly, data on portfolio allocation shifts between crypto and traditional assets during this period is limited, restricting understanding of investor behavior and liquidity flows.

What to watch next

Regulatory announcements and enforcement actions that could materially affect crypto market dynamics and investor confidence.
Disclosures or reports from major crypto fund managers and ETF issuers regarding their current positioning and risk management strategies.
Market data on crypto trading volumes, order book depth, and participant composition to shed light on liquidity conditions and market microstructure.
Corporate earnings reports and economic indicators influencing traditional equities, to monitor whether the observed divergence with crypto persists.
Technical market signals, including any shifts above or further declines below key moving averages, which may indicate changes in trend or investor sentiment.

The current widespread trading of leading cryptocurrencies below key moving averages underscores significant bearish sentiment and structural challenges within the crypto market, contrasting with the relative resilience of traditional equities. While this technical picture is clear, fundamental drivers and market dynamics remain insufficiently detailed, leaving important questions about causation and future trajectory open. Continued monitoring of regulatory developments, market data, and investor behavior will be essential to understand whether this trend signals a prolonged downturn or a potential inflection point.

Source: https://www.coindesk.com/markets/2025/12/16/crypto-bear-grip-tightens-as-75-of-top-100-coins-trade-below-key-averages-vs-just-29-nasdaq-stocks. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.