The cryptocurrency market has entered one of its most volatile stretches of 2025, shedding over $1 trillion in total value since early October and effectively wiping out the year’s gains. Major digital assets, including Bitcoin and Ethereum, have plunged to multi‑month lows, sparking panic among traders and reigniting debates about whether a new bear market has begun.

Crypto’s trillion‑dollar downturn deepens

After peaking at more than $4 trillion in total market capitalization on October 6, the digital asset space has quickly reversed course. Crypto markets have officially erased over -$1 trillion of market cap.

According to Coinglass, roughly $1.8 billion in positions were liquidated within 24 hours, affecting 441,867 traders. Of that, $1.38 billion came from long positions, showing the scale of forced sell‑offs.

Bitcoin’s fall below $100,000 marks a psychological blow

In recent trading, Bitcoin tumbled below $100,000 for the first time since June, bottoming near $99,000 before a mild rebound to just above $101,000. That move reflected a continuation of selling pressure that initially began after a series of macroeconomic shocks in October. According to CoinMarketCap data, Bitcoin’s seven‑day losses now exceed 10%, while Ethereum’s price has slumped more than 9% to around $3,260, its lowest level since July.

Ethereum joined Bitcoin in leading the liquidation wave, with $655 million worth of ETH long positions wiped out in a single day. Other altcoins such as XRP, Solana, and BNB fell between 5% and 8%, contributing to a total of $2.02 billion in crypto liquidations.

“Too many traders were using borrowed money to bet on prices going up,” said Maja Vujinovic, co‑founder and CEO of FG Nexus. “The next few days matter: If Bitcoin can stay above $100k-$105K, it might simply be a healthy reset. If not, we could see a deeper drop. Big investors and companies should be cautious but also watch for smart buying opportunities, since the broader economy and market mood are still shaky.”

Macro headwinds amplify volatility

Analysts point to macroeconomic uncertainty and policy shifts as key drivers of the downturn. The series of dramatic sell‑offs traces back to October 10, when former President Donald Trump announced sweeping 100% tariffs and export controls in retaliation for China’s trade restrictions. Although subsequent negotiations offered brief relief, investor sentiment remained fragile.

The Federal Reserve’s latest communication added fuel to the fire. After reducing its benchmark rate by 0.25% to 3.75%–4%, Fed Chair Jerome Powell suggested that no further cuts were guaranteed in December, saying that “policymakers have not made a decision about December.” His comments reinforced expectations that interest rates could stay higher for longer, pressuring non‑yielding assets such as Bitcoin.

“The crypto market today is facing multiple near‑term headwinds,” said Derek Lim, head of research at Caladan, per Bloomberg. “This is hitting a market that is already fragile from October’s massive liquidation event and a string of hacks.”

Analysts split on whether a bear market has arrived

The scale of the correction has split the market between cautious optimists and outright pessimists. Some traders argue that Bitcoin’s break below $100,000 marks the beginning of a new bear cycle.

Economist Peter Schiff warned that losses for Bitcoin holders and crypto investors “will be staggering,” suggesting the fallout could rival the 2000 dot‑com collapse.

“But if this signals an aversion to risk in general, look out for the even bigger AI bubble to burst,” Schiff added.

Others maintain that this correction resembles earlier shakeouts that set the stage for sharp recoveries. Referring to the 2024 downturn, Ash Crypto observed,

“In the first few days of November 2024, Bitcoin dumped from $71k to $66k, and everyone said the market was done, but then BTC pumped 60% from $66k to $108k in just 45 days.”

Market outlook: correction or capitulation?

As of mid‑November, total crypto capitalization remains precariously above $3 trillion. Traders are watching for technical signs of stabilization around the $96,000–$105,000 range for Bitcoin. Analysts also note that leveraged positions have dropped significantly since October’s record $19 billion liquidation event, a hint that excessive speculation may be flushing out.

Still, the fear and greed index has swung toward “extreme fear,” and open interest in Bitcoin futures has fallen 30% from its October highs. The market is treading carefully as investors await upcoming U.S. inflation data and potential Fed signals about December policy.

Whether this steep pullback marks the start of a prolonged bear market or a painful but necessary cleansing before recovery, remains to be seen. What is clear is that crypto’s euphoric 2025 rally has come to an abrupt, trillion‑dollar halt.

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