Crypto markets lurched lower after the Federal Reserve delivered exactly what everyone said they wanted: the third straight 25bps cut to close out 2025. Santiment’s latest deep dive makes a simple, slightly uncomfortable point: retail treated it as a green light, whales treated it as exit liquidity. Bitcoin shortly rallied to $94,044, Ether surged to $3,433, XRP hit $2.10 and Solana managed to reach $142, but the momentum was short-lived. The BTC price fell by more than 5% at one point, ETH even fell by more than 8.5%. What Caused The Crypto Market Plunge? On 11 December, the FOMC confirmed another quarter-point reduction, completing what Santiment calls the “trifecta of cuts at the end of 2025.” Lower rates mean cheaper borrowing, more risk-taking, and—on paper—a friendlier backdrop for crypto. The Fed still describes an economy growing at a “moderate” pace with inflation above target, and in both the October and December meetings it cut because “the balance of risks (like slowing job growth) supported easing policy.” Related Reading: Will The Crypto Market Benefit From The Trump Fed Takeover? The key shift is liquidity. On 29 October, the Fed decided to slow the reduction of its securities holdings from 1 December, easing the pace of balance-sheet runoff. By 10 December, it went further, saying bank reserves had fallen “too much” and announcing renewed purchases of short-term Treasury bills to keep reserves “ample.” That is a move from shrinking the balance sheet to quietly adding money back into the system. As Santiment notes, the Fed is still data-dependent but clearly more willing to lean dovish to protect financial conditions. Markets, however, front-ran the story. Prediction platform Polymarket showed an “overwhelming amount of optimism” in the hours before Jerome Powell spoke. At the same time, on-chain data flagged abnormal activity: @DeFiTracer spotted a whale selling roughly 100 million dollars’ worth of Bitcoin within an hour, triggering “a healthy mix of sensationalized panic.” The expected outcome—another cut—arrived, but positioning around it was anything but balanced. Bitcoin’s price reaction looked bullish at first. BTC spiked to about $94,044 after the announcement. Yet Santiment’s social data shows that the positive-versus-negative commentary ratio for Bitcoin had already peaked well before Powell’s remarks. The crowd’s emotional high came in anticipation; when the actual rally hit, traders were “quite modestly reactive” despite the move to 94K. Sentiment was spent. Ethereum was worse. Over the same 24-hour window, ETH surged to around $3,433, and the positive comment ratio “was a LOT more interesting.” Santiment describes “a lot of FOMO after a mini surge immediately after Powell spoke,” with many traders who bought the breakout “eventually [getting] burned when ETH fell back down to 3,170.” It is the textbook “buy the rumor, sell the news” pattern: bullish macro headline, short-term bearish price action, retail buying the spike while larger holders “gladly” offload into the mini-rally. Related Reading: Crypto Market Structure Talks: Senator Lummis Addresses Latest Legislation Plans Structurally, though, the report is not outright bearish. Year-to-date, Santiment notes, Bitcoin is down about 3.6%, versus a 17.6% gain for the S&P 500 and a striking 61.1% for gold. “It’s quite the dramatic difference,” the team writes, arguing that “a regression to the mean for BTC would be justified.” With three cuts now locked in and reserves being topped up via T-bill purchases, the “catch-up” case for crypto versus equities and metals “becomes even stronger.” Historically, crypto “has reacted later than equities or commodities when macro trends shift.” On-chain, so-called smart money appears to be acting as if that delayed reaction is coming. Wallets holding 10–10,000 BTC have added 42,565 Bitcoin since 30 November. What is “still [remaining],” Santiment says, is “a notable dump from retail, which would be indicative of the perfect recipe for a major bull run.” For now, they expect smaller traders to “run on fumes from this positive news of rates getting cut, for at least a couple of days.” The bottom line of the report is deliberately sober. The final FOMC decision of 2025 “reinforces a narrative of gradual easing, improving liquidity, and a cautiously supportive environment for risk assets.” After a rough year, “ending the year with three consecutive rate cuts from the Fed is a strong sign.” If inflation drifts toward target and economic data stays stable, Santiment argues, 2026 could finally give digital assets “the breathing room they’ve been waiting for.” Just do not confuse that with an invitation to chase the first post-Fed spike—because, as this week just reminded everyone, that is still where crypto tourists go to get burned. At press time, the total crypto market cap was at $3.04 trillion. Featured image created with DALL.E, chart from TradingView.com
Arca CIO Jeff Dorman calls the current market slide “one of the strangest crypto sell-offs ever,” arguing that price action is increasingly disconnected from both macro conditions and sector fundamentals. Why The Crypto Sell-Off Is “Strange” In a post on X, Dorman notes that traditional risk assets are behaving exactly as textbooks would suggest: “equity, credit and gold/silver markets are launching to ATHs every month because the Fed is cutting rates, QT is ending, consumer spending is strong, record earnings, AI demand still incredibly strong.” Yet crypto continues to grind lower, even as most of the usual bearish narratives have been invalidated. “MSTR isn’t selling, Tether isn’t insolvent, DATs aren’t selling, NVDA isn’t blowing up, the Fed isn’t turning hawkish, the tariff wars aren’t restarting,” he writes, before admitting: “I still have no idea why crypto is down.” In his accompanying essay “The Selling Nobody Can Explain” (Dec. 1, 2025), Dorman details a market that has fallen in seven of the past eight weeks, with only a brief Thanksgiving rally before renewed selling as Japanese markets reopened. The first leg lower followed the October 10 exchange outages at Binance and others, weeks ahead of the FOMC meeting. Much of November’s weakness was retrospectively ascribed to Fed Chair Jerome Powell’s hawkish tone, which drove December rate-cut odds from “almost a 100% chance” to “as low as 30%.” Related Reading: $300 Million Crypto Bet: Kazakhstan’s Central Bank Gears Up What makes the late-November continuation unusual, he argues, is that the macro backdrop has since turned supportive again. Core PPI printed at 2.6% versus 2.7% expected, early post-shutdown labor data point to a cooling jobs market, and December cut odds have rebounded to around 90%. Equities “staged a fierce rally to close November in positive territory,” and betting markets are effectively pricing in Kevin Hassett, a known policy dove, as the next Fed chair. Against that backdrop, Dorman asks, “why are digital assets still selling off on every piece of bad news but failing to rally with good news?” His answer is stark: “I have no idea.” One working explanation is that the marginal seller is no longer crypto-native. Dorman cites Bill Ackman’s remark that his Fannie Mae and Freddie Mac positions are trading in sympathy with crypto, despite orthogonal fundamentals. The comment, he argues, reflects the growing overlap between TradFi, retail and digital-asset investors. What was “a pretty isolated industry” is now deeply integrated into multi-asset portfolios, and in those structures “investments in crypto seem to be the first to go.” The crypto ecosystem itself is highly transparent; by contrast, “TradFi remains more of a black box. And that black box is dominating flows and activity right now.” Wall Street Is Coming Dorman revisits Arca’s framework that token value is a mix of financial, utility and social components. With sentiment at cycle lows, it is no surprise that assets whose value is mostly social – Bitcoin, L1s, NFTs, memecoins – are under pressure. The surprise is that tokens with stronger financial or utility anchors have not consistently outperformed. “While some do (BNB), most do not (DeFi tokens, PUMP). So that’s a bit odd.” Equally unusual, he says, is the absence of “cavalry” buyers; instead, more players are “piling into the weakness, expecting more weakness,” leaning on momentum rather than fundamentals. Related Reading: 30% Of Crypto Market Makers Got Wiped, Mike Novogratz Says On MicroStrategy, Dorman reiterates that the firm “will never be forced sellers,” despite recurring headlines. On Tether, he pushes back against a rapid narrative shift from mega-valuation to supposed insolvency. With USDT roughly 70% backed by cash and equivalents and 30% by gold, bitcoin and loans, he argues that “any questions about their liquidity are just silly,” given the implausibility of 70% same-day redemptions. Solvency risks would require large losses across that 30% sleeve, which he sees as manageable given the parent company’s profitability. Ultimately, Dorman reduces the puzzle to flows and market structure. “There are no buyers within the crypto walls today,” he writes. Crypto-native investors are “exhausted,” and the Wall Street firms that are “coming” into the asset class “aren’t here today.” Until crypto assets can be purchased seamlessly within existing mandates and systems at institutions like Vanguard, State Street, BNY, JPMorgan, Morgan Stanley and Goldman Sachs, “they just won’t do it.” For now, he concludes, the persistent weakness “certainly has us scratching our heads.” At press time, the total crypto market cap was at $2.9 trillion. Featured image created with DALL.E, chart from TradingView.com
Glassnode co-founders Jan Happel and Yann Allemann, who publish under the @Negentropic handle on X, argue that the current crypto crash is being driven not by a broad narrative turn, but by a single, systematic source of sell pressure whose footprint is most visible in Bitcoin and is spilling into the wider complex. Their core assertion is categorical: “What’s happening in Bitcoin right now isn’t a narrative shift: it’s a mechanical unwind.” In that framing, the tape is reflecting the forced exit of one participant rather than an organic repricing of crypto risk. Why Is The Crypto Market Crashing? Negentropic’s thesis starts with momentum indicators behaving in ways they say are inconsistent with “natural markets.” They note that “the 1D MACD just printed a new all-time low… yet price is only down ~33% from the highs,” and add, “This doesn’t happen in natural markets. You only get this when someone is dumping in a straight line.” They pair that observation with capitulation-like oscillators that are not accompanied by the usual macro or leverage shock. As they put it, RSI is near capitulation, “but there’s no macro stress, no credit shock, no leverage detonation, no ETF outflows.” The mismatch matters to their conclusion: “It’s extreme momentum without a catalyst: classic signature of mechanical selling.” Related Reading: Crypto Traders See Bullish Tailwind: Hassett Jumps In Fed Chair Odds They then contrast today’s setup with prior episodes where MACD and RSI reached similar extremes. In those historical cases, Negentropic says, “Price was down 60%, derivatives were blowing out, funding was deeply negative.” By contrast, their read of the present is that confirming stress isn’t there. “ETFs remain net positive, their cost basis is still intact,” they write, and they emphasize that “long-term holders are removing supply aggressively.” They also point to cross-crypto resilience: “Solana ETF inflows are steady, altcoins are holding up relatively well vs btc & eth,” and “eth is holding stronger than btc.” For Negentropic, those relative-strength signals are the tell that this is not a systemwide risk-off event. “If this were real sentiment, all of that would be breaking. It isn’t,” they conclude. Flow regularity is the other pillar of the Glassnode co-founders’ case. They describe a pattern that they say has repeated since October 10: “Same timestamps, same venue-specific thinness, same lack of reflexive bids.” The implication is mechanical intent rather than discretionary trading. “It’s a schedule, not a market,” they write, claiming “21 days of consistent toxic flow.” That sequence, in their view, aligns with “one explanation”: “a liquidity provider or fund was structurally damaged on October 10th,” and “the entity tied to that failure has been reducing risk in a forced, rules-based manner.” Independent tape watchers are describing a remarkably similar cadence. Front Runners (@frontrunnersx) reports that a large seller on Binance has been hitting the market with clock-like consistency. Over “two weeks straight,” they say, the entity “hit the sell button exactly at 9:30 EST, every US market open, without fail.” They add that “kind of consistency usually points to a sophisticated actor operating under specific mandates or time windows,” and that it looks “less like random flow and more like a single entity (or a tightly-coordinated group).” Macro analyst Alex Krüger expands on how that could manifest across venues. He suggests the seller could be “dumping during US hours via a broker or OTC desk that employs smart order routing or hedging strategies across multiple venues.” In his view, the dominance of Binance prints doesn’t require Binance to be the origin. “Most volume naturally” would flow there, he argues, “since it’s where the bulk of the liquidity resides.” Related Reading: Crypto Market Wipes Out $1 Trillion Since October: Analyzing The Forces Behind The Crash Krüger also highlights venue asymmetries that fit a routed-flow story: he has seen “relatively little spot selling routed via Coinbase this week,” while noting “extraordinary levels of spot selling via Bitfinex.” Will The Crypto Crash Be Short-Lived? Delphi Ventures founding partner Tommy Shaughnessy focuses on the urgency implied by the pace. If the flow has been present since 10/10, he writes, “the speed at which they’re selling BTC is pretty crazy.” He interprets that as compulsion rather than strategy: “Means they are price insensitive and need to exit, fast.” Shaughnessy characterizes the move as “violent,” but adds a key qualifier consistent with Negentropic’s finite-seller framing: it’s likely “short lived because it’s not orderly.” If there is a body from 10/10 the speed at which they’re selling $BTC is pretty crazy Means they are price insensitive and need to exit, fast. (Someone had that chart of all red candles for days) Violent but means it’s hopefully short lived because it’s not orderly https://t.co/kaJAKh5Z4M — Tommy (@Shaughnessy119) November 21, 2025 Multicoin Capital founder Tushar Jain likewise describes what he sees as forced liquidation behavior. “It feels like a big forced seller is in the market,” he writes, adding, “We are seeing systematic selling during specific hours.” Jain explicitly ties this to the same October window Negentropic flags, calling it “probably a consequence of 10/10 liquidations,” and says it’s “hard to imagine this scale of forced selling continues for much longer.” He also situates the moment within a longer unwind process, recalling a lesson from prior cycles: “it takes some time for all the bankruptcies to reveal themselves after a big liquidation flush like this,” because “shops are running around trying to figure out what their exposure to insolvent counterparties is.” It feels like a big forced seller is in the market. We are seeing systematic selling during specific hours. Probably a consequence of 10/10 liquidations. Hard to imagine this scale of forced selling continues for much longer. https://t.co/JO6kRmJUUb — Tushar Jain (@tushar_jain) November 19, 2025 Taken together, the sources are presenting a coherent, internally consistent read: crypto’s downside is being dominated by a single, time-boxed, price-insensitive seller whose execution pattern is systematic enough to warp momentum indicators and intraday structure. Negentropic’s bottom line is not merely descriptive but interpretive: “This is not capitulation. This is not a trend break.” It is, instead, “a constrained unwinding through a fractured market.” And because mechanical sellers end when inventory or mandate ends, the Glassnode co-founders argue that when it does, “the rebound will likely be far sharper than the decline that preceded it.” At press time, the total crypto market cap was at $2.83 trillion. Featured image created with DALL.E, chart from TradingView.com
The firm's top researcher says the structural bull case is intact, pointing to AI capex, stablecoins and tokenization as tailwinds even after this month’s shakeout.
In an Oct. 14 memo, Matt Hougan says about $20 billion was liquidated, no major firms failed, core tech mostly held, and clients stayed calm — signs the impact won’t last.
The Oct. 10–11 sell-off that erased an estimated ~$19–20 billion across crypto within 24 hours has ignited a fierce post-mortem over whether market structure—or malice—turned a macro shock into cascading liquidations. Crypto Crash Not Random? On X, Uphold’s head of research Dr. Martin Hiesboeck alleged the crash “is suspected to be a targeted attack that exploited a flaw in Binance’s Unified Account margin system,” arguing that collateral posted in assets such as USDe, wBETH and BnSOL “had liquidation prices based on Binance’s own volatile spot market, not reliable external data,” which allowed a cascade once those instruments depegged on Binance order books. He added that the episode “was timed to exploit a window between Binance’s announcement of a fix and its implementation,” calling it “Luna 2.” The crypto market crash on October 11 is suspected to be a targeted attack that exploited a flaw in Binance’s Unified Account margin system. The issue stemmed from using assets like USDE, wBETH, and BnSOL as collateral, whose liquidation prices were based on Binance’s own… — Dr Martin Hiesboeck (@MHiesboeck) October 12, 2025 Binance has publicly acknowledged extraordinary price dislocations in exactly those instruments during the crash window and has committed to compensating affected users. In a series of notices published Oct. 12–13 (UTC), the exchange said that “all Futures, Margin, and Loan users who held USDE, BNSOL, and WBETH as collateral and were impacted by the depeg between 2025-10-10 21:36 and 22:16 (UTC) will be compensated, together with any liquidation fees incurred,” with the payout “calculated as the difference between the market price at 2025-10-11 00:00 (UTC) and their respective liquidation price.” Binance also outlined “risk control enhancements” after the incident. Related Reading: Crypto Crash: $19.5 Billion Wiped Out In Record-Breaking Liquidation Event The depegs were violent on Binance’s books: USDe printed as low as roughly $0.65, while wrapped staking tokens wBETH and BNSOL also plunged, briefly gutting the collateral value in Unified Accounts and triggering forced unwinds. Third-party market coverage and exchange community posts documented those prints and the immediate knock-on to margin balances during the 21:36–22:16 UTC window. Hiesboeck later framed the chain of events as leverage meeting brittle collateral mechanics rather than pure price discovery. In a follow-up explainer, he wrote: “The Trigger: It all started with external shock. A political post (Trump’s new tariff threat) hit the US stock market, and that fear spilled directly into crypto… The Amplifier: …too many people using massive leverage… Domino Effect: …panic selling hit related assets that were supposed to be stable (like USDe and wBETH), causing them to ‘depeg’… The Lesson (and Binance’s Role): Analysts say the true issue was not an attack, but bad design… [the] system dumped [collateral] immediately at any price.” He added that “Binance is now preparing a huge compensation plan.” Related Reading: 2%–4% In Crypto? Morgan Stanley Thinks That’s The Smart Move Now Macro shock is, in fact, a credible first domino. The Oct. 10–11 liquidation wave was triggered by new tariff threats from the US President Donald Trump against China, which sparked cross-asset risk-off and an aggressive deleveraging across crypto perps. Friday’s crash was the “largest ever” liquidation event with roughly $20 billion in liquidations in a single day, with more than $1.2 billion of trader capital erased on Hyperliquid alone. Where the debate turns technical is on the “exploit” claim. One camp points to a design gap in how Binance’s Unified Account treated certain collateral: rather than anchoring to robust external pricing, liquidation thresholds referenced internal spot pairs that became thin and disorderly precisely when they were most system-critical. That design, critics argue, created a reflexive loop in which depegging collateral forced liquidations that sold more of the same collateral back into the same unstable books. Binance, for its part, has said it will adjust pricing logic for wrapped assets and has begun compensating users who were liquidated or suffered verified losses during the specified window. Ethena’s team, whose synthetic dollar USDe was at the center of the move, contends the problem was localized to Binance’s pricing/oracle path rather than a fundamental break in USDe’s mechanism. At press time, the total crypto market cap recovered to $3.87 trillion. Featured image created with DALL.E, chart from TradingView.com
The recent crypto market crash stunned investors across the globe, but one analyst saw it coming long before it happened. Bitcoin plunged from above $125,000 to briefly below $102,000, and Ethereum dropped to below $3,800, exactly as predicted by popular market commentator Ash Crypto earlier this month. His October 1 post on X warned of a sharp correction meant to liquidate all the bulls before a major rebound in Q4. Now that the dip has played out exactly as he forecasted, Ash Crypto’s outlook for the coming weeks is a powerful rebound phase. Related Reading: A 5% Bitcoin Drop In October? History Shows That’s Rare The Crash Prediction That Shook ‘Uptober’ The sell-off that sent shockwaves through the industry is a quick change in sentiment after Bitcoin’s recent all-time high on October 6. Bitcoin’s decline from above $125,000 to below $110,000 caused widespread panic that flowed into other cryptocurrencies, while Ethereum followed with a sharp drop below $3,800. More than $19 billion in leveraged trades were liquidated across different exchanges in under a day, making it one of the largest wipeouts in crypto history. However, the timing of the crash aligned almost perfectly with a projection on the social media platform X by Ash Crypto. On October 1, Ash Crypto outlined what he called a “pump-then-dump setup” designed to trap overconfident bulls. In his post, he warned that early-month gains would bait retail traders into believing PUMPtober was real before the market reversed violently to shake them out. Notably, the analyst predicted that Bitcoin would dip to around $106,000 and Ethereum to $3,800 or lower before rebounding later in the month. According to him, this correction phase would run until mid-October, sometime around the 15th to 20th of October, before transitioning into a powerful recovery in the last ten days of the month. What Comes Next After The Drop? Ash Crypto’s call has proven accurate, especially against the backdrop of widespread ‘Uptober’ optimism that clouded judgment for many crypto traders. However, despite the predicted bearish move, the prediction post also carried a long-term sentiment that aligns with a bullish Uptober. He explained that once market sentiment turns overwhelmingly bearish and traders begin to assume PUMPtober is canceled, short positions will pile up. It is at this point that a reversal will begin in the final ten days of October, leading to what he described as Q4 parabolic candles. Related Reading: XRP Traders Face Fresh Selling Pressure As Large Holders Move Out Ash Crypto projected Bitcoin will reach between $150,000 and $180,000 by the end of the fourth quarter, while Ethereum will be trading anywhere in the $8,000 to $12,000 range. Following that move, he expects a full-fledged altcoin season that will cause the price of many altcoins to grow 10x to 50x in just a few months. At the time of writing, Bitcoin is trading at $114,049, and Ethereum is trading at $4,087. Featured image from Unsplash, chart from TradingView
Crypto absorbed its largest liquidation shock of 2025, with the heaviest single-day wipeouts since summer 2023 for ETH and SOL and the biggest since June for BTC, triggering a sharp, sentiment-driven downdraft across majors and large-cap altcoins. In a video analysis published today, analyst CryptoInsightUK urged restraint and argued that the move looks like a leverage flush rather than a structural break, pointing to liquidity maps, momentum gauges, and market-cap composites that, in his view, still skew constructive once the dust settles. Do not rush and panic this morning,” he said at the outset. “The only rush and panic thing that you should be doing at this time is if you just want to buy spot… nothing has really changed at all.” He framed the sell-off against near-all-time-high closes last week across market-cap aggregates: Total2 (ex-BTC) “closed at about $1.66–$1.67 trillion,” Total3 (ex-BTC, ex-ETH) at “$1.13 trillion,” and total crypto market cap just shy of $4 trillion at “$3.96.” The message, he said, is to “zoom out,” assess structure, and watch for a familiar bottoming sequence that often follows abrupt long liquidations. Related Reading: Crypto Leverage Whipeout: $600M+ In BTC & ETH Longs Liquidated The analyst’s short-term roadmap hinges on a classic liquidity sweep plus momentum divergence. After a vertical wick clears resting bids and tripping stops, he looks for price to “chop,” revisit—and marginally undercut—the intraday low, while the RSI sets a higher low. “What we’re looking for structurally… is a higher low on the RSI, perfect if it’s in the oversold area… when we have a higher low on the RSI and a lower low in price action… the momentum of the selling is waning,” he said, calling this setup a reliable reversal tell “the higher the timeframe, the better.” Crypto Watch: ETH, XRP, DOGE, ADA He cited fresh examples across majors. For ETH, a drawdown from “about $4,400 down to $4,000” knifed through a “dense” cluster of below-price liquidity that had accumulated for weeks. “This is the first time we’ve seen more liquidity above us than we have below since” the prior five-wave advance, he argued, consistent with an ABC correction that may be maturing. XRP, he said, “pinpointed” its only notable pocket of sub-price liquidity, wicking to $2.66, a level he mapped against $2.8–$2.69. He now sees the “main liquidity… above us for XRP at $3.40, while allowing that a brief wick-fill toward today’s low could complete the divergence pattern he’s watching. Bitcoin’s dominance spike during the flush also fits his playbook. He described the dominance RSI as “massively overbought… probably like on the hourly as overbought as I’ve seen it,” noting that prior forays into this zone have coincided with local peaks in BTC relative strength before rotation back into large caps and selective alts. That context—together with his “zoomed-out” view—underpins his claim that “bullish sentiment gets rewarded over time,” even if the path includes unnerving resets. Dogecoin, he cautioned, can still probe the $0.19–$0.20 zone after reclaiming the $0.22 support region, but he flagged that the 4-hour RSI is as depressed as at prior cyclical lows. He disclosed a “2x” DOGE long around $0.225, acknowledging no hard stop given his conviction in the higher-timeframe trend and accepting the risk of further chop. Related Reading: The Fed Just Changed Everything For Crypto, Says Top Trader Cardano “wicked into” a mapped liquidity shelf near $0.77, with “main liquidity… up at $1.00 and $1.20” on the daily, a configuration he views as asymmetrically favorable once the market stabilizes. What To Watch Now Throughout, he emphasized that today’s damage was amplified by leverage, not fundamentals. “We’ve had a liquidity flush,” he said, referencing a social post he saw that “a billion dollars of leverage got flushed out in 30 minutes.” For him, that is “positive; we want to see this leverage reset.” He cautioned that near-term direction is hostage to US cash-market flows—“The US might wake up and… sell, or… buy the [dip]”—but insisted the larger structures are intact: “Weekly… we’re still sitting at all-time highs… Whether the top’s in or not, I don’t think so. I really, really, really, really, really don’t think so.” His near-term checklist is straightforward: let volatility run its course, look for the RSI higher-low against a marginal price lower-low, and respect predefined support/target zones. “Take your emotion away and look for structures that you know are bottoming structures,” he said. The trader psychology, in his telling, is as critical as the levels. “These things happen and it feels like a culmination of sentiment… anger, frustration, and now probably despair… If it’s too much… go for a run,” he advised, adding that “the market doesn’t care” about anyone’s mood and will “do what it’s going to do anyway.” If the “real storm” is still to come, he implies it’s the post-flush move that matters—whether a final liquidity sweep completes the divergence or a swift rotation lifts majors into the overhead liquidity he’s mapped. Either way, he argues, the decisive phase is ahead, not behind: “Let’s see how things play out… It’s not a time to panic… If you want to be buying things… when we’re oversold like this, it’s a decent time to buy,” he said. At press time, ETH traded at $4,185. Featured image created with DALL.E, chart from TradingView.com
Crypto analyst Maartunn (@JA_Maartun) warned on September 14 that a familiar—and historically unfriendly—market pattern has reappeared: speculative leverage pouring into altcoins while Bitcoin’s derivatives positioning stays conspicuously muted. “History doesn’t repeat, but it often rhymes, and right now a major warning signal is flashing,” he said, stressing that his message is not to incite panic but to flag a shift in market climate that “any smart investor” should not ignore. At the core of Maartunn’s diagnosis is open interest, the notional value of active futures and perpetual positions across venues. “We keep throwing around this term, open interest. What is it? Well, to put it simply, it’s a way to measure the total amount of money and active bets in the market. When open interest rises, it means new money, often speculative money, is coming in,” he explained. Crypto’s ‘Musical Chairs’ Moment In his read, altcoin open interest is “through the roof,” while Bitcoin—“the anchor of the whole market”—is flat. The divergence, he argued, is precisely what preceded the late-2024 drawdown. “Altcoin speculation is heating up — the gap between BTC and Altcoin Open Interest just hit a new high,” Maartuun wrote via X. Maartunn anchored his warning in a recent analogue. “Back in December of 2024, the exact same story played out. Altcoin speculation was running wild, while Bitcoin was just stagnating. And the result? It wasn’t pretty.” The immediate aftermath, he recalled, was a sharp, broad-based markdown and then a tedious consolidation. Related Reading: Crypto Faces Liquidity Endgame—Debt And Inflation Risks Mount By 2026 “We’re talking [about] a 30% drop,” he said of Bitcoin’s move, adding that such declines “don’t happen in a vacuum.” Liquidity retreats to safety, correlations rise, and “those high-flying, speculative altcoins… get hit the hardest.” What followed was “three whole months” of rangebound “chop modus,” a period that historically bleeds momentum strategies and punishes late-cycle leverage. To illustrate how leverage-heavy phases can abruptly unravel, he leaned on a metaphor. “It’s a high-stakes game of musical chairs,” he said. As long as flows are positive, “the party’s in full swing, and everyone feels like a genius.” The structural risk emerges at the moment “the music stops”—an adverse headline, an exogenous macro shock, or simply fatigued bid depth. “Everyone makes a mad dash for a chair, for safety. But in a panic, there just aren’t enough chairs for everybody, and someone always gets left holding the bag.” In crypto’s derivatives-driven microstructure, that dash translates into forceful de-risking and liquidations that can cascade across thin order books. Related Reading: Kraken Co-CEO And Barry Silbert Warn Of Crypto Bubble; 99% Tokens Could Tank Crucially, Maartunn framed his assessment as situational risk—not a deterministic crash call. “This isn’t about predicting a crash or trying to cause a panic, not at all,” he said at the outset. The point, rather, is to recognize that the “growing split in the market” between exuberant altcoin leverage and a subdued Bitcoin base “can’t last forever.” “The level of risk in the market has clearly gone up,” he concluded. “The music is absolutely still playing, but it’s probably a good time to know where the emergency exits are.” The open question is the one he leaves viewers with: whether this is merely “the market… enjoying the music before another painful dip,” as in December 2024, or whether “this time really [is] different.” In either case, Maartunn’s thesis hinges on the same observable setup: a momentum-chasing build-up of altcoin derivatives exposure with no confirming expansion in Bitcoin’s positioning. If the past is a guide, the divergence is less a timing tool than a warning label on the current phase of the cycle—one that tends to end not when everyone expects it, but when liquidity blinks. At press time, the total crypto market cap stood $4.0 trillion. Featured image created with DALL.E, chart from TradingView.com
A recent report revealed that over 50% of all crypto tokens have failed in the past five years, with a significant decrease in token survivability over the past year. Related Reading: Solana: Analysts Forecast Q3 ATH Rally As SOL Retests Make Or Break Level 50% Of Crypto Tokens Have Collapsed On Wednesday, CoinGecko published a report claiming that over half of the tokens registered in its Decentralized Exchange (DEX) tracker, GeckoTerminal, have died in the past five years. The study examined the total number of crypto tokens once listed in the DEX tracker with one trade or more before going defunct. Since 2021, nearly 7 million tokens have been listed in the real-time tracker, with 3.7 million cryptocurrencies no longer actively traded and considered to have failed. As a result, 52.7% of all examined crypto died, 86.5% failing between 2024 and early 2025. According to the report, 49.7% of all recorded project failures between July 2021 and March 2025 occurred in the first quarter of this year. By March 31, 1.8 million tokens had collapsed, representing the highest number of failures recorded in a single year. In 2024, nearly 1.4 million crypto projects failed, accounting for 37.7% of all collapses during the analyzed period. The number of failing projects has significantly increased from 0.5% in 2021 to 25% in 2025’s first three months. Nonetheless, CoinGecko noted that 2024 has the highest number of launches, seeing over 3 million new projects deployed in the crypto market. Since 2021, the total number of projects has skyrocketed by around 1,550%, going from 428,383 listed projects on GeckoTerminal to nearly 7 million crypto projects. Memecoin Frenzy Responsible For Most Failures? The massive increase in token launches was fueled by the launch of the Solana-based memecoin launchpad Pump.fun, which facilitated the deployment of tokens. The platform’s creation led to a “flood of meme coins and low-effort projects entering the market.” Notably, the start of this cycle’s memecoin frenzy saw the launch of hundreds of PolitiFi tokens, celebrity tokens, and scam tokens, with many reaching market capitalizations of hundreds of millions in record time. The report highlighted that crypto failures were in the low six digits before Pump.fun’s launch, with only 12.6% of all dead tokens between 2021 and 2023. By July 2024, reports revealed most celebrity memecoins had crashed over 90% since launch, with the majority essentially “dead.” Related Reading: Monero (XMR) Price Jumps 50% Amid ‘Suspicious’ $330 Million BTC Transfer – Details Amid the Q1 market retraces, most cryptocurrencies have seen a sharp price decline, with some of the strongest tokens retesting monthly and yearly lows. The recent nosedive in token survivability could be related to the market exhaustion and market turbulence, which coincided with the launch of the official TRUMP and MELANIA memecoins and the LIBRA token scandal. “This sharp decline in token survivability may be linked to broader market turbulence, particularly following Donald Trump’s inauguration in January 2025, which coincided with a downturn in the crypto market,” the report concluded. Featured Image from Unsplash.com, Chart from TradingView.com
Low liquidity and massive sell orders likely led to the market imbalance.
In a memo released on February 25, 2025, Matt Hougan—Chief Investment Officer (CIO) at Bitwise Asset Management—drew striking parallels between today’s crypto market and what he observed in July 2024. Titled “Short-Term Pain, Long-Term Gain (Redux),” Hougan’s latest analysis suggests that, despite the current pullback, the industry’s underlying fundamentals remain as compelling as ever. Crypto Echoes Of July 2024 Hougan opened his memo by recalling the environment in July 2024, when he penned an earlier piece called “Short-Term Pain, Long-Term Gain.” Back then, crypto markets were reeling: “Bitcoin, which had peaked above $73,000 in March 2024, had fallen to roughly $55,000, a 24% pullback. Ethereum was down 27% over the same time period.” At the time, Hougan noted that “the crypto market is facing a weird dynamic right now. All the short-term news is bad, and all the long-term news is good.” He also cited catalysts such as potential ETF inflows, the upcoming Bitcoin halving, and more supportive policymaking in Washington, D.C., contrasting them with then-immediate risks like Mt. Gox distributions and government sales of Bitcoin. Related Reading: From Hope To Crypto Panic: How A Day Of Highs For Coinbase Turned Into A Nightmare For Bybit That analysis proved timely. “Shortly after I wrote the memo, Bitcoin bottomed and proceeded to rip straight to $100,000,” Hougan wrote. In his latest note, he sees a similar duality at play: negative short-term developments on one hand, and powerful long-term tailwinds on the other. Yesterday, crypto markets were under renewed pressure: Bitcoin dropped at one point more than 10% to as low as $86,050, Ethereum by 18%, and Solana lower by 21%. The immediate trigger: last weekend’s hack of Bybit, a Singapore-based exchange, which suffered a $1.5 billion Ethereum theft via a phishing scam. Though Bybit dipped into its reserves to make clients whole, the breach reverberated across the industry. The hack followed on the heels of a spate of memecoin scams, including Libra, endorsed by Argentine President and noted crypto proponent Javier Milei. The memecoin cost investors billions in what Hougan described as a “multi-billion-dollar scam.” Moreover, Melania, a project tied to First Lady Melania Trump, also collapsed, causing substantial losses for token holders. Trump, a memecoin linked to US President Donald Trump fared no better. “Taken together, these events probably spell the end of the recent memecoin boom,” Hougan commented. While many institutional and long-term crypto participants may view the memecoin sector with skepticism, its trading volume and buzz have fueled overall market activity—particularly in the Solana ecosystem. Related Reading: Crypto CEO Calls Start Of The Altcoin Season With A Caveat Despite the negative headlines, Hougan points to a robust foundation beneath crypto markets. First, Hougan highlights the pro-crypto regulation under the Trump administration. In his view, “We are in the early days of a massive shift in Washington’s attitude towards crypto.” He cites the US Securities and Exchange Commission’s recent decision to drop high-profile lawsuits against companies like Coinbase and ongoing legislative efforts around stablecoins and market structure. Such developments, he argues, will help crypto break into mainstream finance. Second, institutional adoption is still growing. Large-scale buyers—including asset managers, corporations, and even governments—continue to accumulate Bitcoin. Hougan notes that so far this year, “investors have plowed $4.3 billion into bitcoin ETFs,” and he expects that figure to balloon to $50 billion by year-end. Hougan also expects a stablecoin boom. Stablecoin assets under management have climbed to a record $220 billion, marking a 50% jump from last year. With favorable legislation making its way through Congress, Hougan believes the sector could grow to $1 trillion by 2027. Lastly, the Bitwise CIO predicts the rebirth of DeFi and tokenization. Lending, trading, prediction markets, and derivatives see record heightened usage. Meanwhile, the tokenization of real-world assets continues to hit all-time highs in assets under management, suggesting that blockchain-based representations of traditional securities and commodities may be on the rise. Hougan refers back to his July 2024 thesis to underline today’s opportunity. On the negative side, markets have to navigate aftershocks from Bybit’s massive hack and the implosion of multiple memecoin projects. On the positive side, regulatory clarity, institutional inflows, stablecoin expansion, and DeFi innovation continue unabated. “This is what I call a no-brainer,” Hougan wrote, underscoring his stance that serious long-term factors overwhelmingly outweigh the short-term setbacks. He does offer a measured warning, noting this pullback may prove more pronounced than last summer’s dip: “The memecoin boom was large, and the hangover could be more significant. It might take days, weeks, or months to work through it.” Yet his conclusion remains firm: the long-term growth narrative remains intact. “When that happens, I like my money on the long term,” he stated, reiterating that patience can be rewarded in a market often swayed by headline-driven volatility. At press time, BTC traded at $88,349. Featured image created with DALL.E, chart from TradingView.com
The broader crypto market experienced a pronounced downturn following yesterday’s Federal Open Market Committee (FOMC) meeting, held on December 18. After the US Federal Reserve delivered a 25-basis-point rate cut as anticipated, it also signaled fewer cuts in 2025 than previously expected. In response, the Bitcoin price fell by more than 5%, dropping below the $100,000 mark before showing slight signs of recovery. Altcoins saw across-the-board double-digit percentage declines. The Federal Reserve’s decision—while meeting expectations for a 25-basis-point reduction—came with a notable shift in the projected rate trajectory for next year. Rather than the previously communicated four cuts, the central bank now anticipates only two, signaling a more cautious stance. This recalibration of future monetary policy sent ripples through the entire risk asset spectrum, prompting the S&P 500 to decline 3% and the Russell 2000 Small Cap Index to drop 4.4%. Is The Crypto Bull Run Over? Within the crypto sector, the immediate aftermath was pronounced. Matt Hougan, Chief Investment Officer at Bitwise Asset Management, addressed the market conditions this morning via X, writing: “The big catalyst today was the Fed announcement […] The Fed cut rates by 25 basis points as expected, but lowered expectations for next year from 4 cuts to 2 cuts. Higher rates are bad for risk assets, and the Fed’s announcement caused a sharp pullback in all risk assets.” Related Reading: Bitwise Exec Reveals His Personal Top 3 Crypto Predictions For 2025 According to Hougan, Bitcoin’s price action reflected heightened sensitivity to shifting monetary conditions. He noted that Bitcoin price drop was exaggerated by leveraged positions being liquidated. “$600 million of leveraged long positions were blown out in today’s market, exacerbating the pullback.” Despite the steep correction, Hougan argued that the broader outlook remains constructive: “Crypto now has internal momentum, and nothing about today’s announcement interrupts the mega-trends: The pro-crypto reversal in Washington policy, rising institutional adoption and ETF flows, Bitcoin purchases by governments and corporations, and major tech breakthroughs in the programmable blockchain space.” He pointed to technical indicators as a supporting factor for his thesis: “My favorite momentum gauge is still positive: Bitcoin’s 10-day exponential moving average ($102k) is still above its 20-day exponential moving average ($99k).” Related Reading: Crypto Watchlist: Top 5 Coins To Watch This Week Hougan concluded his thread by maintaining that the shift in Fed expectations would not derail the longer-term bull run, stating: “Crypto’s in a multi-year bull market. 50bps of projected rate cuts won’t change that.” Other market observers offered similar interpretations of the Fed’s communication strategy. Warren Pies, Founder of 3Fourteen Research, commented via X: “By upping inflation forecast, lowering UE rate, and keeping cuts in place, the Fed has actually opened the path to more than 2 cuts in 2025 as data ‘surprises’ to the dovish side.” Renowned macro analysts echoed this sentiment. Crypto analyst and podcaster Fejau (@fejau_inc) described the central bank’s approach as a strategy designed to guide market expectations: “Fed forced itself into cutting this week so is using a hawkish 2025 FFR dot plot forecast to talk down long bond yields despite cutting today […] Welcome to macro psyop warfare. Smoke and mirrors baby.” He characterized the dot plots as a tool for psychological influence rather than a strict roadmap: “It’s important to view the dot plots not as a future forecast of events, but as a psychological tool […] The Fed has bought themselves time to allow further data to come out before they actually make a move […] Can almost guarantee you 2025 will not occur as is forecasted in their dots.” Andreas Steno Larsen, CIO of Steno Global Macro Fund and CEO at Steno Research, offered a similar assessment: “By hawking up all forecasts a lot, the Fed lowers the bar materially for cuts next year. It is a wise move, if you want to cut further, but do not want to precommit.” At press time, Bitcoin traded at $101,766. Featured image created with DALL.E, chart from TradingView.com
The broader crypto market experienced a major crash on December 9. While the Bitcoin price dropped from $101,109 to as low as $94,150, marking a -7% decline, the altcoin market suffered significantly more severe losses. Ethereum fell by as much as -12% at one point, XRP by -22%, Solana by -15%, Cardano by -23%, Dogecoin by -19%, and Shiba Inu by -25%. According to Coinglass data, more than 562,000 traders were liquidated in the past 24 hours, and total liquidations reached $1.7 billion. The largest single liquidation order took place on Binance in the ETHUSDT pair, valued at $19.69 million. Of the $1.7 billion in total liquidations, $1.55 billion involved long positions. Notably, Bitcoin’s leverage flush was relatively modest compared to that of altcoins, with $143 million in BTC longs liquidated. By contrast, ETH saw $219 million in liquidations, SOL $57 million, DOGE $86 million, XRP $53 million, and ADA $22 million. Across the entire crypto market, this represented the largest leverage flush since April 2021, when a record $10 billion in crypto futures liquidations occurred in a single day. This surpassed the previous record of $5.77 billion. Related Reading: November Crypto Performance: Memecoins Up 95%, ADA, SOL, And DOT Follow With Strong Gains Following the flush out, Bitcoin and most altcoins staged a sharp upward recovery, although they have yet to return to their pre-crash levels. Over the past 24 hours, BTC remained down by -2.4%, ETH by -4.8%, XRP by -9.6%, SOL by -6.4%, and DOGE by -8.4%. What Caused The Crypto Market Crash? According to crypto analyst ltrd (@ltrd_), the underlying dynamic began with increased selling pressure on Coinbase, where traders started selling aggressively almost an hour before the major cascade. Although the ultimate plunge was triggered by a chain reaction of liquidations, this prolonged selling in the spot markets was critical in pushing prices into zones where overleveraged traders had little choice but to unwind. Overheated funding fees and rising open interest levels meant that once the initial cracks appeared, heavily leveraged positions had no chance to escape. “How can we tell that the market was overheated? It’s simple—the Funding Fee plus the increase in Open Interest. These two factors are drivers of the current market and indicate that people are overleveraged,” ltrd explained. When the market finally broke down, its effects were uneven. Bitcoin displayed characteristics distinct from other instruments, and Ethereum showed encouraging signs of accumulation on the way down, hinting that a major buyer could have been taking advantage of the opportunity. Yet the truly astonishing developments occurred with XRP on Coinbase, where, as ltrd put it, “You can see something crazy—the market impacts for XRP on Coinbase are mind-boggling. Something absolutely strange happened. On a large, relatively mature market, we witnessed a cascade of big sell orders that caused the market to drop by over 5%. We don’t know exactly what happened, but it’s certainly unusual.” Ltrd speculated that these enormous and abnormal sell orders may have come from a significant player forced to liquidate at any price. Related Reading: Trump’s Crypto Czar David Sacks Is Super Bullish For Solana: Here’s Why “It might be worth monitoring this situation over the next few days. Perhaps a major player was forced to sell as if there were no tomorrow,” he mused. The consequence of such an event, even in supposedly deeper markets, was a swift crash that spilled over into perpetual swaps trading elsewhere, triggering further liquidations. According to ltrd, “When something like this happens, it’s typically a cascade of unintentional orders. Market makers absorb this selling pressure and hedge it, causing signal propagation across the exchanges.” Even large-cap altcoins like XRP, which have market caps on par with major US companies, still face liquidity constraints that become glaringly apparent under stress. “Relative to these market caps, the liquidity in the market is still poor,” he noted, explaining how this contributes to the observed volatility and the dramatic nature of such events. As prices eventually stabilized and began to bounce from their lowest points, ltrd highlighted how this pattern is common in overheated markets: “The next thing you always see in a hot market is a quick price reversal from the lowest point. There are a huge number of liquidations, limited liquidity, and still many players in profit who want to buy the dip. Let’s see who comes out as the winner.” Macro analyst Alex Krüger placed the entire event into a broader perspective. “Nothing’s changed. Expect prices to still go up,” he stated, while noting that future conditions, such as a pro-crypto US administration under Donald Trump, could set a more constructive backdrop for digital assets. Although Krüger cited the possibility of more leverage flushes in the coming months, he viewed these events as a normalizing force. “Today’s was a major leverage flush out. Mainly for altcoins. Very normal in hot and highly levered markets. This is how crypto baptizes newcomers and keeps crypto natives disciplined,” Krüger said, and added “Never fun to be caught long in a leverage flush out. But that’s what this is. Funding back to the base line across the board. This time alts as well. Expect a few more of this in the next few months.” At press time, Bitcoin traded at $97,401. Featured image from Shutterstock, chart from TradingView.com
Bitcoin dominance has notched a new yearly high amid a brutal Ethereum-led sell-off.
Analysts say Bitcoin could sink as low as $50,000, but strong macro conditions and an entrenched “buy the dip” mentality will quickly rebound BTC’s price.
Leverage traders are nursing losses of over $165 million as the price of Bitcoin tumbled 5%.