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The last 41 days in crypto have been some of the strangest I’ve seen. Crypto has erased $1.1 trillion in market cap, about $27 billion disappearing every day. Market cap is now 10% below where it was during the record $19B liquidation on October 10th. So what changed?
Strangely, nothing fundamental. In fact, just days ago President Trump said making America number one in crypto is a national priority. Yet Bitcoin is still down 25% over the last month.
What we’re seeing is a structural, mechanical selloff. It started in mid-to-late October with major institutional outflows. In the first week of November alone, crypto funds saw about $1.2 billion leave the market. That kind of outflow triggers big problems when paired with crypto’s reckless leverage. Traders aren’t using 2x leverage—they’re using 20x, 50x, even 100x. At 100x, a one or two percent move wipes you out instantly.
When institutions pull money and millions of traders are overleveraged, you get a chain reaction of forced selling. That’s why we’ve seen multiple billion-dollar liquidation days recently. Daily liquidations of $500M have become normal, and in thin markets that leads to violent swings. Sentiment has collapsed as well. The Fear & Greed Index hit 10, matching February’s bottom, even though Bitcoin is still up roughly 25% from April.
Meanwhile, gold has outperformed Bitcoin by 25 percentage points since early October. Ethereum looks even worse—down more than 8% on the year and 35% since October 6th. All of this is happening while other risk assets are rallying.
But when you zoom out, this looks like a structural bear market, not a fundamental one. Thin volume, leverage, liquidations, and institutional positioning are dragging prices down. Fundamentals have actually improved.
The macro backdrop also supports a recovery. Global M2 is at a record $137 trillion. Japan is rolling out major stimulus. The US may issue $2,000 tariff dividends. Liquidity is fuel, and crypto historically responds strongly to liquidity waves.
This downturn hurts, but it feels like a growing pain, not the end of the cycle. I’ve seen these patterns for over a decade. The bottom feels close.
Thanks for reading, and have a prosperous day.
Marko
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