- Analysts attribute the crash to extreme leverage in the market rather than weak fundamentals.
- Longer-term sentiment remains positive, with observers like Raoul Pal viewing current weakness as a temporary liquidity squeeze.
- At the same time, US spot Bitcoin ETFs experienced significant outflows, marking one of the worst stretches with five consecutive days of net withdrawals totalling over US$1.9 billion.
The crypto market has seen further shock waves, as most assets have retraced more deeply. Bitcoin dropped well below the US$100k (AU$154.3k) mark, trading as low as US$98,852 (AU$152,593) early Wednesday morning Australian time. By the time of writing, it was slightly up, trading at around US$101,522 (AU$156,714) — still down 18% on the monthly chart.
With the price drop came a wave of liquidations, with around 489,000 traders liquidated over the past day, according to data from Coinglass. About US$588 million (AU$907 million) in ETH longs and US$587 million (AU$905 million) in Bitcoin long positions were wiped out.
The Fear and Greed Index also remains firmly in “Fear” territory, as traders wonder whether the rollercoaster will continue.
Related: AFP ‘Crypto Safe Cracker’ Unlocks US$5.9 Million Wallet in Landmark Digital Forensics Breakthrough
Analysts React to Market Crash
In a recent tweet, The Kobeissi Letter said crypto’s recent US$1 trillion (AU$1.5 trillion) market-cap wipeout isn’t about weak fundamentals but about extreme leverage. With record adoption and ongoing deregulation, the market remains structurally strong, they said — but unprecedented leverage has made it hyper-reactive, triggering massive liquidations and sharp volatility even on minor news.
The long-term thesis is stronger than ever, but the short-term picture points to larger swings in both directions. Leverage is a wild ‘drug.’
The Kobeissi LetterAnd another tweet, this time from analysts at Santiment, shows that dip-buying is still happening — if you’ve got dry powder left, that is.
Longer term, institutional adoption and commitment seem unwavering, with Senator Cynthia Lummis telling Bloomberg TV that the current administration is still looking at ways to build the Strategic Bitcoin Reserve in an effort to combat US debt.
Related: Crypto Overtakes Property: Australians Swap Bricks for Bitcoin
Macro analyst Raoul Pal also remains bullish through the current pain, arguing that the weakness in crypto and broader markets is a temporary liquidity squeeze caused by the US government shutdown and quantitative tightening (QT).
Once spending resumes and liquidity floods back — via Treasury outlays, rate cuts, SLR relief, and clearer crypto regulation — he expects a broad “liquidity wave” to lift all risk assets, especially crypto.
His message is to endure the volatility, because “the Road to Valhalla” lies just beyond this short-term drain.
ETFs See Large Outflows
Meanwhile, US spot Bitcoin exchange-traded funds (ETFs) have seen heavy selling over the past few days, with total outflows topping US$566 million (AU$873 million) on 4 November, after another US$186 million (AU$286.9 million) loss the day before.
Major funds like Grayscale’s GBTC and Fidelity’s FBTC led the declines, though BlackRock’s IBIT results for the latest trading day have yet to be reported — meaning the final numbers could look even worse once they’re in.
This marks one of the worst stretches of outflows, with five consecutive days of net withdrawals totalling more than US$1.9 billion (AU$2.9 billion).
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