Since the "1011 crash," market capital inflows and macroeconomic uncertainties have had a severe negative impact on the crypto market.
Written by: 1912212.eth, Foresight News
After BTC slowly rose from $86,000 to $93,000, the market showed no signs of abating. At 8:00 AM Beijing time on December 1st, BTC plummeted 3.7% within an hour, dropping from $90,000 to below $87,000. ETH also fell from $3,000 to around $2,800, marking another widespread decline in Altcoin.
According to Coinglass data, $434 million in positions were liquidated across the network in the past 4 hours, of which $423 million were long positions.
Market sentiment has once again plunged into extreme panic. This time, the timing of the sell-off was remarkably precise. In the last hour of November, the market was forcefully hammered down into a large bearish candlestick with an extremely long upper shadow, completely destroying the last vestiges of bullish confidence. With the monthly chart closing bearish, the technical picture directly declares a "broken bull market structure," and all bullish alignments on weekly and monthly charts have collapsed.
On Polymarket, the probability of BTC rebounding to $100,000 in 2025 has fallen to 35%, while the probability of it falling to $80,000 has risen by 15% to 50%.
The real trigger this time was not the Federal Reserve, nor Trump's policies, nor China's increasingly stringent regulations.
On November 29, the People's Bank of China convened a meeting of its coordination mechanism for combating speculation in virtual currencies. Officials from the Ministry of Public Security, the Cyberspace Administration of China, the Central Financial Stability and Development Office, the Supreme People's Court, the Supreme People's Procuratorate, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Justice, the People's Bank of China, the State Administration for Market Regulation, the State Financial Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange attended the meeting. The meeting emphasized that virtual currencies do not have the same legal status as legal tender, lack legal tender status, and should not and cannot be used as currency in the market. Virtual currency-related business activities constitute illegal financial activities. Stablecoins are a form of virtual currency and currently cannot effectively meet the requirements for customer identification and anti-money laundering, posing a risk of being used for money laundering, fundraising fraud, and illegal cross-border fund transfers.
The meeting required all units to adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China and its subsequent plenary sessions, regard risk prevention and control as the perpetual theme of financial work, continue to uphold the prohibitive policy on virtual currencies, and persistently crack down on illegal financial activities related to virtual currencies. All units should deepen coordination and cooperation, improve regulatory policies and legal basis, focus on key links such as information flow and capital flow, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal and criminal activities, protect the property safety of the people, and maintain the stability of the economic and financial order.
This crackdown, involving a wide range of departments and classifying stablecoins as a form of virtual currency while highlighting risks such as money laundering and fraud, has undoubtedly poured cold water on already precarious market confidence.
The "94" policy in 2017 and the "519" policy in 2021 both caused significant pullbacks in the crypto market within a short period of time.
The market is never short of stories, and this time the story is called "China's last batch of funds forcibly leaving the market." Once the story is over, a long winter will begin.
However, some argue that since the crash of 1011, market capital inflows and macroeconomic uncertainties have had a serious negative impact on the cryptocurrency market.
Rob Hadick, a general partner at Dragonfly, said the deleveraging event, triggered by low liquidity, poor risk management, and weak oracles or leverage mechanisms, has caused significant losses and created enormous uncertainty.
Boris Revsin, general partner and managing director at Tribe Capital, shares the same view, calling it a "leverage cleansing" that has had a ripple effect across the market. Meanwhile, the macroeconomic environment has become less favorable: expectations for short-term rate cuts have faded, inflation remains stubborn, the job market is weakening, geopolitical risks are rising, and consumer pressures are increasing.
Anirudh Pai, a partner at Robot Ventures, highlighted concerns about a slowdown in the U.S. economy. Key growth indicators—including the Citi Economic Surprise Index and 1-year inflation swaps (derivatives used to hedge against inflation risk)—have begun to weaken. Pai noted that this pattern has occurred before previous recession fears, fueling broader risk aversion.
CMS Holdings co-founder Dan Matuszewski stated that, aside from tokens backed by buyback mechanisms, the crypto market is experiencing virtually no "incremental capital inflows," with the exception of DAT (Digital Asset Treasury) companies. As new demand dries up and ETF inflows cease to provide effective support, prices are falling more rapidly.
Analyst Timothy Peterson stated that the current Bitcoin price movement is remarkably similar to the 2022 bear market. Looking at daily and monthly charts, the correlation between this year's Bitcoin price and 2022 is 80% on the daily chart and a staggering 98% on the monthly chart. If history continues to repeat itself, a true recovery in Bitcoin's price may not occur until the first quarter of next year.
