Bitcoin Faces Potential Drop Below $80K Amid $1.7B Crypto Liquidations

Bitcoin experienced a significant downturn this November, dropping below $85,000 for the first time since April. A series of leveraged liquidations and weakening investor sentiment contributed to this trend, marking what is anticipated to be the worst monthly decline since the 2022 crypto winter.

Market Developments

BTC briefly hit a low of $81,600 but later found some stability near $84,000. This decline has erased its year-to-date gains and pushed the market down to levels not seen since January following the ETF boom. The negative impact is not limited to Bitcoin.

Major Altcoins Affected

• Ether has fallen below $2,750, experiencing a nearly 14% drop in just a week.
• Solana has decreased over 10% in the past 24 hours.
• XRP, BNB, and Cardano have all seen declines ranging from 8-15%.

Overall, major cryptocurrencies have retraced between 20% to 35% from their November highs, while smaller cryptocurrencies are suffering even more severe losses.

Liquidation Statistics

In the wake of these declines, nearly $2 billion in liquidations occurred within a single day, according to CoinGlass data. Bitcoin alone accounted for approximately $964 million of these liquidations, followed by $407 million from Ether and significant unwinds across various altcoins. Around 396,000 traders faced liquidation, with a notable loss of $36.7 million on the Hyperliquid platform.

External Economic Factors

Broader market conditions are compounded by external pressures. Global stock markets are experiencing their most challenging week in seven months, raising concerns about AI-driven valuations and the potential for rate cuts by the Federal Reserve in December. The MSCI All Country World Index has dropped more than 3% this week, while U.S. tech stocks remain under strain.

In the cryptocurrency sector, the situation is also deteriorating. U.S.-listed Bitcoin ETFs saw net outflows exceeding $900 million on Thursday, marking their second-worst day since their launch earlier in 2024. Additionally, open interest in perpetual futures has decreased by 35% since reaching its peak of nearly $94 billion in October, further restricting liquidity.

Diminishing Retail Sentiment

Retail investor sentiment has also sharply declined. The Crypto Fear & Greed Index dropped to 11 on Monday, indicating “extreme fear”—the lowest reading since late 2022. Historically, such extreme levels have preceded significant market lows. However, with prices breaking established support and institutional investments reversing, there are currently no signs of market stabilization.