Bitcoin is heading into its toughest month since the industrial crisis of 2022, weighed down by huge sell-offs, a contraction in futures activity and heavy withdrawals from major investment products. The token briefly fell to $81,629 on Friday before recovering some of the fall, and Ether fell below $2,700 during early trading.
With Bitcoin falling approximately 23% in November, the scale of the drop draws comparisons to June 2022, when the collapse of TerraUSD caused failures in cryptocurrency lenders, hedge funds and, ultimately, FTX. Although the current decline is not tied to a single corporate crisis, weaknesses in the market structure (especially the amount of leverage built up over the past few weeks) are playing a major role.
Much of the recent slowdown can be attributed to the activity that unfolded on October 10, when the price of Bitcoin retreated enough to trigger automatic closures of highly leveraged positions on major derivatives platforms. That single day wiped out roughly $19 billion in leveraged bets and wiped out about $1.5 trillion from the combined value of digital assets. Forced closures tend to accelerate declines because traders have no control over the timing or size of the exit; The system liquidates positions at market prices, producing rapid and sometimes disorderly movements.
The pressure did not stop after the October event. Data from CoinGlass shows that an additional $2 billion in leveraged positions were eliminated in the past 24 hours, confirming that traders had continued to maintain substantial exposure even after previous losses. As more positions are eliminated, liquidity reduces and price movements become larger because fewer buyers are willing to absorb heavy selling.
Institutional participation has also changed significantly. A group of twelve U.S.-listed Bitcoin ETFs recorded outflows of $903 million on Thursday, the second-largest single-day withdrawal since the funds began trading in January 2024. Large investors often add positions during deep pullbacks if they expect a rebound. Their absence this time suggests many are waiting for clarity before committing capital. Open interest in perpetual futures, another indicator of market share, has fallen 35% from its October high of $94 billion, indicating that active traders are taking a step back rather than trying to buy weakness.
Moves in US stocks have added an extra layer of influence. Stocks that rose earlier in the week after Nvidia’s earnings lost steam as investors questioned whether valuations had become too overextended. Those changes made traders more cautious with assets that rely heavily on liquidity, and cryptocurrencies are often one of the first places to reduce risk exposure during periods of uncertainty. As a result, fewer market participants were willing to counter forced sales coming from leveraged accounts.
Some fund managers believe the trading pattern suggests that a large holder, or a small group of holders, is reducing exposure over multiple sessions. This type of constant, measured sales can affect prices even without major public announcements.
“There is a constant download from one source, and the size indicates that this is unlikely to be retail activity,” said Pratik Kala, portfolio manager at Apollo Crypto. He added that the absence of strong buy-side support makes each sale more impactful because fewer traders are willing to take the opposite side of the trade.
Another point of focus is Strategy Inc., the company associated with Michael Saylor’s long-running Bitcoin purchases. The company has used borrowed capital to build a sizable position in Bitcoin for several years. Prolonged price declines can increase scrutiny on those holdings because lenders typically require additional collateral if asset values fall below certain thresholds. Strategy Inc. shares fell 5% on Thursday, raising questions about whether traders are testing levels that could put pressure on leveraged positions.
Bitcoin is now more than 30% below its all-time high from early October. Trading activity has slowed, leveraged exposure has reduced and institutional flows remain negative. When these factors occur together, price movements tend to become more volatile because the market has less depth and fewer high-volume participants willing to stabilize the trade.
Recent price movements have been primarily determined by the forced closure of leveraged positions and continued withdrawals from Bitcoin ETFs. With fewer major buyers stepping in, each wave of selling has had a stronger effect on the price. Until liquidation activity slows and ETF flows stabilize, price levels are likely to respond sharply to even moderate selling because trading volumes are lower than at the beginning of the year.
Frequently asked questions
Why has Bitcoin fallen so sharply this month?
Bitcoin fell after a large number of leveraged trades were automatically closed when prices fell. These forced exits removed a significant amount of capital from trading platforms, causing more leveraged accounts to be liquidated.
How big is Bitcoin’s drop in November?
Bitcoin has fallen around 23% in November. This is its steepest monthly drop since 2022, when several major crypto companies went bankrupt following the collapse of TerraUSD.
Why Are Bitcoin ETFs Seeing Large Withdrawals?
Several US-listed Bitcoin ETFs experienced large capital outflows as investors reduced their exposure during the decline. One group of funds recorded nearly $1 billion in withdrawals in a single day.
Is this drop related to a major crash like FTX?
No. This month’s drop is related to forced liquidations and ETF withdrawals, not a new currency failure. Unlike 2022, no major platform collapse has caused this decline.
Are large Bitcoin holders selling during this recession?
Trading patterns indicate that one or more large accounts may be reducing their holdings in stages. Because there are fewer active buyers at the moment, these sales are having a stronger effect on the price than usual.
Also read: Bitcoin falls to $89,500: Lowest price since April shakes markets