The synchronous movement of cryptocurrencies What we are seeing in November is not a mere isolated scare, but the confluence of several fronts: macro, institutional money flow, excess leverage and some broken narrative.
The market value has lost around 20–30% since the October highs, or in other words, more than $1–1.5 trillion capitalizationwith bitcoin falling from the $126,000 zone to the $80–90,000 range and making its worst month since 2022.
Ether, solana, cardano and company are also experiencing double-digit drops.
Market value has lost on the order of 20–30% from October highs
The first piece of the puzzle is in the leverage. When an asset rises almost parabolically for months, the accumulation of long positions is inevitable.
The market had been warning since October with an episode of forced liquidations which exceeded nineteen billion dollars in a single day. That was a warning. November has been the corrected and increased repetition.
Each break of support has caused new cascades of automatic liquidations, a reflection of a market that is as vertically rising as it is fragile in its liquidity structure. Just like in 2022, then positions had also been piled up in successive layers of optimism that only needed a spark to crumble.
The second axis is the behavior of bitcoin ETFs. The great regulatory milestone that fueled the rally of the year has become the emergency exit for those who want to undo positions without moving the market in a disorderly manner.
The prospect of higher rates for longer has cooled appetite for speculative assets
The funds have recorded days with outputs close to a billion dollars. BlackRock, which had been the great channel of institutional money, has also been dragged by the risk reduction dynamic.
Whoever had entered with discipline is also leaving with discipline and that has a direct impact on an asset that still does not have the market depth that many attribute to it.
Added to this table is the macroeconomic turn. The Federal Reserve has not followed the expectations that the market has discounted since September and the possibility of high rates for longer has cooled the appetite for speculative assets.
Equities have corrected, especially technological ones without profits, and part of the capital has moved towards more attractive assets – in relative terms – and more manageable volatility.
Gold and silver have become a kind of alternative refuge that absorbs part of the money that previously flowed into cryptocurrencies.
gold and silver They have performed better than bitcoin in this period and have become a kind of alternative refuge that absorbs part of the money that previously flowed into the cryptos. That rotation suggests the market is seeking protection in tangible assets as it reviews the more expansionary narratives of the last cycle.
Does all this mean that we are at the beginning of a big implosion? Not yet. But you have to be cautious in interpretation because bitcoin is already below the levels of a year ago after evaporating its annual gains in just a month and a half.
The technology behind digital assets has not deteriorated and their adoption has not disappeared. What has been broken is the inertia which intended any AI narrative announcement or rally to justify new highs. That psychological ground has cracked.
The parallelism with what is happening in big technology adds interesting reading. The bubble associated with artificial intelligence is still alivebut is already showing signs of fatigue with valuations starting to look disconnected from actual cash flows.
Does all this mean that we are facing the beginning of a great implosion? Not yet
The market is reviewing its relationship with risk at a speed that we have not seen since before the pandemic. Crypto It is part of that same equation because it has been placed in the same group of assets that need an abundance of liquidity and tolerance for optimism to sustain the thesis.
This month’s drop may end up being a simple defrosting within a still bullish underlying trend. It may also be the beginning of a longer digestion phase.
The market will decide, as always, when it wants and not when its participants want it. The only certain thing is that The correction has not been capricious or accidental. It has been the result of a system that had been stretched too fast and too far.