(HedgeCo.Net) The cryptocurrency market experienced one of its most severe single-day drops in recent memory today, with Bitcoin (BTC) crashing as low as $85,422 before stabilizing around $86,000–$87,000. This marks the lowest level for the flagship cryptocurrency since April 2025, wiping out all year-to-date gains and dragging the total crypto market capitalization down by over 7% in the past 24 hours to approximately $3.2 trillion.
The sell-off intensified overnight, triggered by a combination of macroeconomic pressures and crypto-specific factors. Investors are increasingly skeptical about a Federal Reserve rate cut in December, with odds dropping sharply from earlier in the month. Thinning order books on exchanges, exacerbated by recent liquidations of market makers, amplified the downside momentum. Major U.S. spot Bitcoin ETFs saw continued outflows, with billions exiting since mid-October amid fears of prolonged risk-off sentiment in global markets.
Bitcoin’s decline has been relentless this November, often dubbed “Red November” by traders. From a peak above $126,000 in early October, BTC has shed more than 32%, forming a bearish “death cross” on charts where the 50-day moving average crossed below the 200-day. Analysts point to sustained selling from mid-cycle wallets and reduced liquidity as key drivers, while long-term holders remain steadfast.
The pain extended across the board. Ethereum (ETH) tumbled over 7% to around $2,800, struggling below the psychologically important $3,000 level. Altcoins fared worse: Solana (SOL) dropped sharply, Layer-1 and DeFi tokens saw double-digit losses, and meme sectors led the bleed lower. The Crypto Fear & Greed Index plunged deeper into “Extreme Fear,” reflecting widespread capitulation.
Despite the gloom, some on-chain metrics offer glimmers of hope. Whale accumulation has picked up during dips, and institutions like Harvard University recently tripled their Bitcoin ETF holdings. However, experts warn that without a clear macro catalyst—such as renewed rate cut expectations or positive regulatory news—the path of least resistance remains downward in the short term.
Market participants are watching key support levels closely. For Bitcoin, a break below $85,000 could accelerate toward $80,000 or lower, echoing past cycle corrections. Trading volumes spiked 50%+ amid the chaos, indicating high conviction on both sides but predominantly bearish positioning in derivatives markets.
This correction comes despite earlier 2025 highs fueled by pro-crypto policies under the Trump administration and booming ETF inflows. Over $1 trillion has been erased from the crypto market since October peaks, highlighting the asset class’s volatility and correlation to risk assets like tech stocks.
As the dust settles, debates rage: Is this a healthy washout paving the way for the next leg up, or the start of a prolonged bear market? With year-end approaching, volatility is expected to remain elevated.