- Crypto market faced $102 billion loss in five hours early Monday, market cap shrank 3.5%.
- Bitcoin drops over 2.0%, Ethereum slumps 5.0% while BNB nosedives 6.0% amid a broad sell-off.
- Fed talks, a slump in BTC’s net institutional buying, and a retreat from OGs underpin the cryptocurrency fall on November 03.
- Chatter about maturing crypto market gains momentum, but investors await key U.S. data for clear directions.
Cryptocurrency markets witnessed a heavy sell-off, around $102 billion in five hours, early Monday, as a slew of fundamental catalysts joined a technical breakdown to offer a last blow to the recently struggling investment avenues.
While portraying the size of the crypto loss on X, the CoinBureau highlights the major coins as bearing the burden of a drawdown.
On the other hand, CoinGlass highlights over $530 million crypto liquidations in the last 24 hours, the majority of which ($476.21 million) are long position liquidations justifying the fall in the market prices. That said, position liquidation is the forced closing of a trader’s positions by a broker due to insufficient margin. This data reveals whether long (buy) or short (sell) positions were closed, helping explain recent price movements. Typically, heavy long liquidations happen during a downtrend and suggest short-term bearish sentiment, and vice versa.
Position Liquidations
Notably, crypto market capitalization shrank 3.5% to $3.58 trillion in the last 24 hours, but the Bitcoin Dominance jumped from 59.2% to 59.7% during the said timeframe, according to CoinMarketCap data.
Meanwhile, Bitcoin drops over 2.0%, Ethereum is down nearly 5.0% and Binance Coin (BNB) slumps over 6.0% during the latest fall.
Read: Binance Coin Price News: BNB Breaks 19-week Support of $1,030; Can Bears Retake Control?
Key catalysts
The following are some of the key catalysts that drew analysts’ attention while justifying the latest slump in the crypto prices. Among them, chatter surrounding U.S. Federal Reserve (Fed), sustained selling from long-term holders, and a weakness in the institutional buying have gained major attention.
Fed chatter propels U.S. Dollar, Yields to Disappoint Crypto Bulls
Federal Reserve (Fed) commentary remained a central driver to fuel the U.S. Dollar and Yields the previous week, which in turn weighed on the crypto prices.
The U.S. central bank (Fed) matched the market’s forecasts of announcing a 0.25% rate cut on Wednesday, but the Chairman Jerome Powell and other policymakers resisted confirming a December rate reduction and fuelled the USD, as well as yields.
That said, market pricing now assigns a 68% probability of a December rate cut, down from the previous week.
Notably, the U.S. Dollar Index (DXY) hit a three-month high during its two-week uptrend, while the U.S. 30-year, 10-year, and 1-year Treasury bond yields also posted a weekly gain in the last, exerting downside pressure on the cryptocurrencies.
A Retreat of Institutional Buyers
Capriole founder Charles Edwards highlighted a reduction in the net buying of institutional investors as the key catalyst justifying the latest slump in prices. In doing so, the crypto advocate cites the first instance in seven months where institutional net buying of Bitcoin actually dropped below the daily average of new BTC hitting the market.
Notably, U.S. spot Exchange Traded Fund (ETF) data from the SoSoValue showed that the spot BTC ETFs marked the weekly outflow of $798.95 million for the last week, while the spot ETH ETFs reported the first weekly inflow in three, worth $15.98 million.
OGs Sell BTC To Bolster the Blow
Alongside Fed woes and institutional selling, talks about a sustained selling from long-term investors, generally termed as Original Gangsters (OGs) in crypto, also gained major attention from market players while chasing the bears.
As per the CoinBureau data, long-term holders shed more than $33 billion in Bitcoin throughout October. Notably, some among the investors’ fraternity argue that this shift in the pattern doesn’t really call for a bearish catalyst as it portrays the change of ownership.
In this direction, Bitwise CEO Hunter Horsley highlights de-risking in his update on X:
Talks about Panic and Maturity in Crypto Market
With the market’s rejection of ‘Uptober’ hopes and a massive sell-off during early November, some on the trading desks are discussing the panic and maturity of the cryptocurrencies. The bias, however, needs confirmation from this week’s U.S. data and the risk catalysts, as the crypto optimists still consider the latest fall a buying opportunity, amid hopes of more industry positives from the West.
Conclusion
October’s downbeat performance and $102 billion sell-off during early November suggest caution for crypto bulls. Investors should carefully track whale activity, macro developments, and technical signals before committing, as bears remain poised to take control.
