jakiro
Shaw, Bitcoin Vision
Around 23:00 on the evening of November 3,The cryptocurrency market is experiencing a “dive” again, with Bitcoin, Ethereum and many major altcoins all experiencing short-term rapid declines..Bitcoin fell below US$106,000 in a short period of time, and fell by more than 4% in 24 hours; Ethereum fell below US$3,600 in a short period of time, and fell by more than 7% in 24 hours.In the past 24 hours, the entire network has been liquidated to US$1.285 billion, including US$1.161 billion for long orders and US$124 million for short orders.
Since November, the expected rebound in the market has not yet arrived. Instead, it has continued to decline, and the “diving” trend has once again appeared. What is the reason?What factors are driving market panic to intensify? Has this bull market entered its final stage?Is the market about to bottom out??
1. Cryptocurrency “dives” again in the evening and early morning
Around 23:00 yesterday evening, the cryptocurrency market once again experienced a “diving” trend, with Bitcoin, Ethereum and many major altcoins all experiencing short-term rapid declines.The crypto market rebounded slightly after early morning, but the upward trend was weak and it fell again.Bitcoin fell below $106,000, briefly touching $105,306.56, a 24-hour drop of more than 4%, the amplitude reached 2.44% within 1 hour;Ethereum fell below $3,600, briefly touching $3,558.82, a 24-hour drop of more than 7%, the amplitude reached 4.21% within 1 hour.Mainstream currencies such as BNB, SOL, and LTC also experienced sharp short-term declines.Data shows that the panic and greed index dropped to 21 today, and the level changed from panic to extreme panic.
Coinglass data shows,In the past 24 hours, the entire network has been liquidated to US$1.285 billion, including US$1.161 billion for long orders and US$124 million for short orders..Bitcoin’s liquidation liquidation amounted to US$326 million, Ethereum’s liquidation liquidation amounted to US$335 million, and Solana’s liquidation liquidation amounted to US$155 million.
The short-term “dive” of cryptocurrency has cast another shadow on the market, which has been experiencing increasing panic recently.
2. DeFi protocol Balancer was attacked, triggering market panic
Yesterday afternoon,DeFi protocol Balancer was exposed and attacked, and a large number of assets including WETH, Staked ETH and wstETH were transferred from the protocol treasury address.According to Lookonchain monitoring,The amount of damage caused by the attack on the Balancer protocol has reached 116.6 million US dollars.Balancer officially issued a statement stating that Balancer V2 Composable Stable Pools suffered an attack.Since these pools have been running on-chain for years, many of them have exceeded the time window in which they can be paused.All pools that are currently still available for suspension have been suspended and are in recovery mode.Other Balancer fund pools are not affected.This problem is limited to the V2 composable stable pool and does not affect Balancer V3 or other types of fund pools.Engineering and security teams are investigating as a priority.Balancer officials also stated that they are willing to pay 20% of the stolen assets as a white hat reward to recover the assets, which is valid within 48 hours.
In addition, GoPlus posted on social media that,All Fork Balancer’s DeFi projects are affected by this vulnerability, and multiple protocols have been attacked..It is recommended that investors check the Balancer fork protocol list on the Defillama website, stop interacting with it immediately, and withdraw assets in time to protect themselves.Hasu, strategic director of Flashbots and strategic consultant of Lido, said that Balancerv2 was launched in 2021 and has since become one of the most watched and frequently forked smart contracts.This is very worrying.Every time a contract that has been online for so long is attacked, it (rightly so) sets back DeFi adoption by 6 to 12 months.
As a major DeFi protocol that has been online for many years,The negative impact of the attack on Balancer was widespread, once again raising questions about the security of DeFi protocols..This incident may have also induced panic in the market and stimulated a short-term rapid decline in the encryption market.
3. ETF funds continue to flow out, and institutional investors temporarily withdraw
According to data from Farside Investors,Last week, the U.S. Bitcoin spot ETF saw a net outflow of US$799 million. Last week, the Ethereum spot ETF saw a net outflow for three consecutive days, with a total outflow of US$363 million..In addition, Lookonchain monitored that 10 Bitcoin ETFs had a net outflow of 1,987 BTC (valued at US$213.65 million) yesterday, and 9 Ethereum ETFs had a net outflow of 21,022 ETH (valued at US$78.2 million).CryptoQuant issued an article stating that Bitcoin’s recovery lacks continued capital inflows brought by ETFs and Michael Saylor strategies, and these are the main demand drivers.In addition, Matrixport analysis stated that the Ethereum ETF performed flatly again, and Bitmine was actually the only institution that continued to buy.Inflows plummeted to just $300 million and $600 million in September and October, and have barely continued since then.
The continued net outflow of ETF funds reflects, to a certain extent, the temporary withdrawal of funds from institutional investors, causing the crypto market to temporarily lose one of the main driving factors of this bull market..
4. Giant whale investors were forced to liquidate, exacerbating market volatility.
The previous large long orders of whale investors were forced to be liquidated.Lookonchain monitoring,The “100% Winning Whale” winning streak has now ended, and all Bitcoin long orders were closed at a loss, while still continuing to reduce its long positions in ETH and SOL.His total profit and loss went from +$33 million to –$17.6 million.Subsequently, the “100% Winning Whale” returned to the long position and deposited $20 million USDC into Hyperliquid.He immediately established a long position through two large market orders: 150 Bitcoin (approximately $15.8 million) and 5,000 Ethereum (approximately $17.9 million).
Onchain Lens monitoring,“Big Brother Moji” Huang Licheng’s 25x leveraged long position in Ethereum was completely liquidated, bringing his total loss to $15 million.On-chain analyst @ai_9684xtpa also showed that Huang Licheng currently only has $16,771.24 left in his account.Since October, it has replenished a total of 1.727 million USDC to Hyperliquid and has basically lost all its money. The cumulative loss in the Hyperliquid account has reached US$13.33 million.
The whale investors’ previous large-amount long contracts were liquidated during the decline, and they quickly returned to long positions again. This kind ofFrequent leveraged contract trading increases short-term volatility in the crypto market.
5. Uncertainty about macro factors such as the Federal Reserve’s interest rate cuts has increased
As the dust settles on the Federal Reserve’s interest rate cut in October, the market is focusing on expectations for a rate cut in December.However, the unexpected “hawkish” stance of Federal Reserve Chairman Powell and the internal differences reflected in the Federal Reserve’s FOMC statement have madeMarket expectations for the Fed to cut interest rates in December continue to weaken.CME “Fed Watch” data shows that the probability of the Fed cutting interest rates by 25 basis points in December is 67.3%, and the probability of keeping interest rates unchanged is 32.7%.The probability that the Fed will cut interest rates by 25 basis points cumulatively by January next year is 55.8%, the probability of keeping interest rates unchanged is 21.8%, and the probability of cumulative interest rate cuts by 50 basis points is 22.3%.
Many Federal Reserve Board members also have different opinions on whether to cut interest rates in December.Cook said a rate cut in December is possible but will depend on new information coming out later.Milan said that the current monetary policy is still too tight and increases the risk of economic downturn.Bostic said a rate cut in December was not a given.Despite strong market expectations for a rate cut by the end of the year, Powell made it clear that a rate cut in December was not a sure thing.
In addition,The U.S. government “shutdown” crisis continues, and its negative impact on the macroeconomy still exists.Goldman Sachs economist Alec Phillips warned that the U.S. government shutdown could have the largest economic impact in history, could last longer than the 35-day shutdown in 2018-19, and affect more institutions.A six-week shutdown could knock 1.15 percentage points off economic growth in the fourth quarter, with a rebound not expected until early 2026.U.S. Treasury Secretary Bessent also said that the U.S. government shutdown has begun to affect the U.S. economy.
The weakening of market expectations for the Federal Reserve’s interest rate cut in December and the continued crisis of the U.S. government “shutdown” have increased macroeconomic uncertainty and also affected the crypto market..
6. Whether the market has entered the final stage and predictions of future trends
After the “dive” of cryptocurrency, the market has been interpreting whether the end of the bull market has arrived and how it will develop next.
1. CryptoQuantThe article stated that although Bitcoin’s actual market value increased by $8 billion, Bitcoin’s recovery lacked the sustained inflows brought by ETFs and Michael Saylor strategies, which are the main demand drivers.
2. MatrixportAccording to chart analysis, the performance of the Ethereum ETF was dull. After strong inflows of US$5.2 billion and US$4.3 billion in July and August respectively, inflows plummeted to only US$300 million and US$600 million in September and October, and there was almost no continuation thereafter.Absent fresh institutional demand, Ethereum remains vulnerable to further consolidation and could even face a deeper pullback.
3. Katie Stockton, founder and managing partner of Fairlead StrategiesIn a report, it said that Bitcoin has fallen below the 200-day moving average of $109,800.The 200-day moving average is one of the most widely watched indicators for defining long-term trends and also acts as a support level for Bitcoin.This could signal further downside for the cryptocurrency, with $94,200 as the next target.
4. Singaporean crypto investment institution QCP CapitalAccording to an analysis published in the article, the encryption market had a unstable start and continued its downward trend.On-chain data shows that OG holders transferred a large amount of Bitcoin to Kraken, which is a continuation of the continuous outflow in October.The recent sell-off lacks clear macro drivers, even as other risk assets perform well amid favorable policies.Bitcoin’s turbulent consolidation has triggered market speculation about whether this cycle is coming to an end. Whether this heralds the arrival of a new round of cryptocurrency winter is still unclear.At present, long-term holders are taking profits, and institutional capital inflows and application promotion are consolidating the market foundation.
5. Crypto Analyst @IamCryptoWolfA post on the X platform stated that ETH is undergoing an expanded wedge backtest, and the previous resistance level now serves as a solid support level.November looks set to see a steady consolidation, with a possible breakout at the end of the month, followed by an acceleration in gains in December.
6. Tom Lee, Chairman of BitMineIn an interview with CNBC, he said that Ethereum’s current fundamentals are performing well, with stablecoin transaction volume and application layer revenue hitting record highs, and price breakthroughs will follow.Tom Lee reiterated his previous year-end price predictions, predicting that Bitcoin will rise to the $150,000-$200,000 range, while Ethereum will rise to $7,000.
7. Crypto Analyst AliSaid, “$3,120 is the key demand area for ETH, with 2.62 million ETH accumulated in this area.”
