Bitcoin showcased its volatile nature yet again, sliding under $104,000 to a two-week low. The downtrend was spurred by at least over $1.37 billion in leveraged liquidations, with long positions shouldering around $1.2 billion of the losses, according to data from CoinGlass. Market pressure continues to mount due to persistent ETF outflows, selling off by long-term holders, and a general risk-avoidance attitude prevalent among investors.
Imperfect Liquidation Data and its Effect on Investor Sentiment
The cryptocurrency market is not perfect and neither is the available liquidation data. Some platforms like Bybit divulge full data, while others like Binance and OKX do not provide complete data, often releasing it in inconsistent bursts. This means that the actual liquidated value could very likely surpass the reported $1.37 billion.
The Market’s Response
Following this announcement, Bitcoin’s price declined nearly 4% in a span of 24 hours from $106,400 to an intraday low of $103,860. This plunge was mirrored in the performance of altcoins. Ethereum dropped by around 6% to approximately $3,500, Binance Coin dropped by 8% to less than $950, and Solana slid almost 10% to $159. This downswing drove down the total crypto market capitalization to about $3.6 trillion.
The market analysis presented by Bitfinex’s analysts suggested an observable weakening in investor conviction. Despite the marketplace being rife with top-buyer clusters, the overall sentiment remains precarious. While capitulation is yet to set in, the analysts caution that unless Bitcoin prices register a decisive recovery, time will increase the headwinds for bullish investors.
Long-Term Holder Pressure and ETF Weakness
Long-term holders have persisted in the distribution, inciting structural pressure that is critical for major bull phases to resume. This is a trend that historically has only eased when these wallets moved back into an accumulation mode.
Another contributing factor to Bitcoin’s dip is sustained weaknesses in the ETF sector. On Nov. 3rd, Bitcoin spot ETFs reported $187 million in net outflows, marking their fourth straight day of redemptions. Meanwhile, Ethereum ETFs shed $136 million, in contrast to Solana ETFs, which recorded $70 million in inflows – their fifth consecutive positive session.
Fear and Greed Index Reveals Risk-Averse Market
The Crypto Fear & Greed Index fell to 21, indicating an accentuated caution among investors. This apprehension appears to have followed the massive liquidation on Oct 10, combined with the impact of the ongoing government shutdown and concerns that crypto prices may follow global liquidity trends.
However, the launch of the new Solana ETF is viewed as a bright spot amidst this turbulence. The ETF enters the market strong, despite the general apprehensive sentiment. Market analysts have suggested that the government’s return to normal operations could positively influence short-term sentiment.
Exhausted Demand Amid a Fragile Structure
Current onchain and derivatives data show a significant decline in liquidity. The open interest for Bitcoin options has remained low for several weeks, and spot depth has also decreased across major exchanges.
Prediction markets have also adopted a bearish attitude. Contracts on Polymarket predict a 78% chance of Bitcoin dropping below the $100,000 mark before 2026, indicating a growing sentiment among traders for a possibility of a major correction next year.
Despite all these, Bitfinex analysts warn that unless ETF inflows or new institutional buyers help soak up the supply, Bitcoin’s retest could likely extend towards the $100,000 region or even lower in the foreseeable future.
Disclaimer: This article is intended solely for informational purposes. It is not meant to be used as legal, tax, investment, financial, or other advice.
