Crypto Crash Erases $1.1T in 41 Days, BTC Down 25%
Crypto markets have plunged in a severe crypto crash, erasing $1.1 trillion in market cap over the last 41 days. Bitcoin tumbled 25% in one month, with Ethereum and major altcoins also suffering steep losses. Institutional crypto funds recorded $1.2 billion of outflows in early November, while extreme leverage—up to 100x—triggered cascading liquidations. A single 2% move in Bitcoin sparked the record $19.2 billion liquidation on October 10, illustrating how highly leveraged positions can amplify volatility.
Daily liquidations of over $500 million have become the norm, and three days in the past 16 saw more than $1 billion wiped out. The Crypto Fear & Greed Index hit 10 (“Extreme Fear”), echoing the lows from February. Meanwhile, traditional gold outperformed Bitcoin by 25 percentage points since early October. Ethereum plunged 35% since October 6 and is down 8.5% year-to-date, underlining the depth of the sell-off across the market.
Despite the turmoil, analysts like The Kobeissi Letter suggest a market bottom may be near. Traders should brace for continued volatility but look for potential buying opportunities as leverage unwinds and fundamentals reassert control.
Bearish
The sharp $1.1T wipeout and 25% Bitcoin drop signal heightened market risk and persistent selling pressure. Extreme leverage has triggered record liquidations, echoing past crashes in 2018 and May 2021 when margin calls fueled cascading losses. Short-term volatility will likely remain elevated as leveraged positions unwind and risk sentiment stays subdued. In the longer term, a capitulation phase could near a bottom, offering buying opportunities once forced selling abates, but traders should remain cautious until fear indicators recover and outflows stabilize.