Shaw, Jinse Finance
Starting late on November 13th, cryptocurrencies continued their downward trend. The market accelerated its decline in the early hours of November 14th, with Bitcoin briefly falling below $99,000, touching $98,000.4, its lowest point since early May; Ethereum briefly fell below $3,200, touching $3,154.22, a nearly 7% drop in 24 hours. Solana, Dogecoin, and XRP also saw significant declines. In the past 24 hours, $721 million in positions were liquidated across the network, with $582 million in long positions and $139 million in short positions liquidated.
The US government shutdown has ended , and there have been frequent positive developments in cryptocurrency regulation and policies recently. However, why has the market rebound been weak, and instead continued to decline? What other factors are hindering the recovery of cryptocurrencies ? Is it currently in a deep correction or has it entered a bear market? Is there a chance for a rally before the end of the year?
I. Cryptocurrency rebound falters, market remains weak
The cryptocurrency market experienced another rapid decline this morning. Bitcoin briefly fell below $99,000, touching $98,000.4 , its lowest level since early May, with a 24-hour drop of nearly 3%. Ethereum briefly fell below $3,200, touching $3,154.22 , with a 24-hour drop of over 6.6%. Solana, Dogecoin, and XRP also saw significant declines . Solana fell 7.49%, Dogecoin fell 5.21%, and XRP fell 2.43%.
According to Coinglass data, $721 million in positions were liquidated across the network in the past 24 hours, affecting over 193,000 individuals. Of these, $582 million were long positions liquidated, and $139 million were short positions , with long positions being the primary target. BTC liquidations totaled $261 million, ETH liquidations $213 million, and SOL liquidations $49.778 million.
In addition, all three major U.S. stock indexes fell sharply on Thursday, with the Nasdaq Composite Index, dominated by technology stocks, closing down 2.29%. Tech giants generally declined, with Tesla falling 6.64% and Nvidia dropping 3.58% .
The waning optimism following the end of the US government shutdown, the continued decline in expectations for a Federal Reserve interest rate cut, ETF fund flows, and whale selling have all hampered the recovery of the cryptocurrency market.
II. The US government has ended its shutdown, but economic recovery will take time.
On November 13, US President Trump signed a temporary funding bill, ending the longest government shutdown in US history . The bill will provide continuous funding for the federal government, ensuring most government agencies have operating funds until January 30, 2026. However, the partisan struggle between the Republican and Democratic parties continues. The budget deadline at the end of January next year, the battle over universal healthcare subsidies, and even the fiscal battles leading up to next year's midterm elections will all become the main battlegrounds for the two parties.
This longest government shutdown in history has had a significant negative impact on the economy and markets . Trump stated that the shutdown has caused a $1.5 trillion loss, and the full impact will take weeks or even months to calculate. White House economic advisor Hassett stated that due to the shutdown, only employment data will be released for the next month, not the unemployment rate. He predicts that the US fourth-quarter GDP growth will decline by 1.5 percentage points due to the shutdown. The Congressional Budget Office estimates that the six-week shutdown will reduce fourth-quarter GDP by 1.5 percentage points, ultimately resulting in a net loss of approximately $11 billion. An IMF spokesperson stated that the IMF has detected signs of weakness in the US economy. Partly affected by the government shutdown, the IMF expects US fourth-quarter GDP growth to be lower than its previous forecast of 1.9%.
The brief optimism following the end of the US government shutdown quickly dissipated, with market focus shifting to a large amount of delayed economic data, uncertainty surrounding the prospect of a Federal Reserve rate cut, and concerns about overvalued tech stocks. This triggered a "risk-averse mode," leading to a widespread sell-off of overvalued tech stocks and risk assets. This deteriorating risk sentiment also spread to the crypto market, causing a continued decline in cryptocurrency assets .
Third, internal disagreements within the Federal Reserve regarding interest rate cuts are widening, with several voting members adopting a hawkish stance.
The Federal Reserve is increasingly divided on whether to cut interest rates again in December , with several Fed governors recently making statements regarding the December rate decision. Fed Governor Milan reiterated on Wednesday that he expects inflation to decline and reiterated his call for lower interest rates. Milan believes monetary policy must be adjusted to move away from its overly tight stance, thereby mitigating some of the downside risks to the economy. Meanwhile, most regional Fed voting members are not enthusiastic about a December rate cut. Currently, four regional Fed presidents with voting rights ( Boston Fed President Collins, St. Louis Fed President Musalem, Chicago Fed President Goolsby, and Kansas City Fed President Schmid, who voted against the October rate cut ) are not actively pushing for another rate cut in December. Fed Governor Hamak stated that interest rate policy should remain restrictive to exert downward pressure on the still worrying inflation level. Furthermore, Minneapolis Fed President Kashkari recently stated that he does not support the Fed's previous rate cut decision but remains cautious about the best course of action at the December meeting. Regarding the upcoming December interest rate decision, he said that he could offer reasons for a rate cut based on data trends, or he could offer reasons for maintaining the current rate; we'll have to wait and see.
According to CME's FedWatch tool, the probability of the Federal Reserve cutting interest rates by 25 basis points in December is 51.6%, while the probability of keeping rates unchanged is 48.4%. The probability of a cumulative 25 basis point rate cut by the Fed by January is 50.3%, the probability of keeping rates unchanged is 29.1%, and the probability of a cumulative 50 basis point rate cut is 20.6%. Furthermore, federal funds futures and overnight index swaps (OIS) contracts linked to the Fed's December 9-10 meeting show a slightly less than 50% probability of a 25 basis point rate cut.
The deepening divisions within the Federal Reserve, coupled with hawkish statements from several voting members, have led to a decline in market expectations for a December rate cut . Investors are concerned about whether liquidity will be sufficient and whether they can smoothly access risky assets such as cryptocurrencies.
IV. ETF inflows have not yet recovered, and the market continues to be under pressure.
CoinShares' latest weekly report indicates that digital asset investment products experienced outflows for the second consecutive week, totaling $1.17 billion . Market sentiment was pessimistic due to continued volatility in the crypto market and uncertainty surrounding a December US interest rate cut, but ETP trading volume remained high at $43 billion. Bitcoin saw an outflow of $932 million last week; Ethereum also experienced significant outflows, totaling $438 million.
Data from Farside Investors shows that the U.S. spot Bitcoin ETF saw a net outflow of $610 million yesterday, while the spot Ethereum ETF saw a net outflow of $122 million. The Ethereum ETF has experienced net outflows for three consecutive days this week, totaling $413 million.
ETF fund flows are a key indicator of institutional investor activity in the crypto market, and sustained ETF inflows are a crucial driver of the 2025 bull market. Continued net outflows from ETFs suggest that the crypto market has temporarily lost a major boost to its rebound .
Fifth, profit-taking by long-term holders and selling by whale increased downward pressure on the market.
CryptoQuant data shows that Bitcoin long-term holders (LTH) are accelerating their selling of Bitcoin , with approximately 815,000 Bitcoins sold in the past 30 days, a new high since January 2024. As demand contracts, selling pressure is putting downward pressure on prices. Analyst Crazzyblock stated that long-term investors have been cashing in some profits through selling in recent months. Additionally, OnchainLens detected 4,363.5 ETH (worth approximately $14.47 million) transferred from a SharpLink-linked wallet to the OKX exchange, suggesting the start of a sell-off. Lookonchain monitoring also revealed that an anonymous hacker panicked during a market downturn, selling 2,243 Ethereum (approximately $8.05 million) at $3,589.
OnchainLens monitoring shows that a certain whale holding a 20x short short position in Bitcoin currently has a floating profit exceeding $15 million. This whale has accumulated profits exceeding $41.7 million through multiple Bitcoin short operations. OnchainLens also monitored a whale deposited 23,500 ETH (approximately $82.62 million) into Aave V3, then lent out 40 million USDC and transferred it to Binance, subsequently purchasing another 20,787 ETH (approximately $73.81 million) and depositing it into Aave V3 again. Onchain analyst AiYi monitored an address (0x7fe...17ac6) that opened short positions in BTC, ETH, HYPE, and SOL, currently holding a total position of $74.09 million with a floating profit of $1.805 million. The ETH short position has the largest floating profit, reaching $541,000.
Profit-taking by long-term holders and selling by whale exerted significant downward pressure on the market. Furthermore, the frequent trading of leveraged contracts by whale made it difficult to effectively mitigate market volatility .
VI. Analysis of Cryptocurrency and Other Asset Market Trends
The anticipated recovery and rally in the crypto market has failed to materialize, instead experiencing a continuous downward correction. Other global asset markets have also failed to show exciting trends. Will the global market recover in the remainder of 2025? Is the crypto market currently undergoing a deep correction, or has it transitioned from a bull to a bear market? Let's examine some market interpretations .
1. Matrixport stated, "Cryptocurrency trading volume remains weak relative to market size. Over the past 12 months, total market capitalization has increased from $2.4 trillion to $3.7 trillion, while daily trading volume has decreased by 50%, from $352 billion to $178 billion. This divergence may indicate more limited market participation and weakening upward momentum, and if this situation persists, a cautious stance may be necessary. Based on recent on-chain metrics, Bitcoin may have entered a mini-bear market phase. While several potential catalysts exist, its ability to drive a sustained upward trend remains uncertain. Reported trading activity and fee revenue on listed exchanges remain subdued against a backdrop of low liquidity."
2. Morgan Stanley strategist Denny Galindo stated that the crypto market has entered the "autumn phase" of Bitcoin's four-year cycle and advised investors to take profits before a potential "winter" arrives. He noted that historical data shows Bitcoin's price cycles exhibit a stable "three up, one down" pattern. Galindo suggested investors lock in profits in advance to prepare for a possible Crypto Winter.
3. Wintermute stated , "Bitcoin still correlates with the stock market, but only when the market is down. The correlation coefficient remains high at around 0.8, but Bitcoin reacts more strongly to declines in the Nasdaq than to rises. This negative performance deviation has reached levels not seen since the end of 2022, while the current price is hovering near all-time highs."
4. JPMorgan analysts stated that Bitcoin's downside from current levels is "very limited," with support around $94,000. Meanwhile, the analysts reiterated their prediction from last week, based on a volatility-adjusted comparison between Bitcoin and gold, that Bitcoin's price could rise by approximately $170,000 over the next 6-12 months.
5. Strategy founder Michael Saylor stated that Bitcoin's market capitalization will surpass that of gold by 2035, and firmly predicted: "I have no doubt that by 2035, Bitcoin will become an asset class larger than gold."
6. Crypto analyst @ali_charts wrote that if this Bitcoin cycle is similar to the 2015–2018 or 2018–2022 trends, then the top appeared on October 26, and the macro downtrend may have already begun.
7. CryptoQuant analyst Darkfost stated that the deleveraging process in the market continues, excess risk is being cleared, and leverage use is gradually cooling down. Open interest has decreased by 21% over the past three months (90-day change), with leveraged positions declining significantly. In bull markets, the decline in leveraged positions often precedes trend reversals, helping to cleanse the market and rebuild it on a healthier foundation.
8. Alliance DAO co-founder QwQiao published an article stating that although macroeconomic factors such as the Federal Reserve's quantitative easing (QE), the rebuilding of the US Treasury's general account (TGA), and interest rate cuts point to a market rally, intuitively, it's all over. He emphasized the inevitability of the four-year cycle prediction, leaving the market at a frustrating crossroads. He observed that most savvy traders and long-term investors have turned bearish. QwQiao considers artificial intelligence (AI) to be the sole driver of the cycle, far exceeding liquidity indicators and technical signals. He warned that if the AI bubble bursts, the entire market will collapse; conversely, if AI-related stocks continue to rise, bears will be completely wrong. He likened NVIDIA (NVDA) to Bitcoin in the crypto world, pointing out that when AI stocks (especially NVIDIA) rise, funds flow out of crypto and other assets, causing crypto to fall, and vice versa, forming a binary situation of AI stocks vs. everything.
9. A brief analysis by Anderson Economic Group LLC points out that the economic impact of this longest government shutdown in history will significantly exceed that of the 2018-2019 shutdown. Its full impact has not yet materialized.
