On November 20, 2025, the cryptocurrency market navigated a period of significant pressure, with a sharp correction erasing over $1 trillion in value from its October peak and pushing global market capitalization toward the $3.09 trillion mark. Bitcoin itself briefly slipped below the $90,000 threshold to a seven-month low before showing signs of resilience and stabilizing around $91,800. This downturn was not a random event but the result of a confluence of key factors, including a shaky macroeconomic backdrop, intense institutional selling, and a violent unwinding of speculative leverage.
A Perfect Storm of Macro and Institutional Pressures
The market’s fragility was exposed on October 10, when a single-day meltdown triggered over $19 billion in leveraged position liquidations, setting off a cascade of negative momentum. This event occurred against a backdrop of deep economic uncertainty. With key U.S. economic data delayed and the Federal Reserve’s committee appearing deeply divided on interest rate policy, investors found themselves lacking clear direction. The fading expectation of imminent Fed rate cuts increased the risk premium on volatile assets like cryptocurrency, causing many momentum traders to retreat.
Institutional behavior further fueled the decline. Analysis pointed to sustained selling from long-term Bitcoin holders, often called “OGs”, which flooded the market with supply. Simultaneously, significant outflows were recorded from major spot Bitcoin ETFs, a clear signal of cooling institutional appetite in the short term. This sentiment was echoed by Ethereum co-founder Vitalik Buterin, who voiced concerns about the potential risks of growing institutional capture by giants like BlackRock on the network’s foundational principles.
The Leverage Liquidation Spiral
The market downturn was dramatically accelerated by the mechanics of leverage itself. As prices began to fall, it triggered a massive wave of forced liquidations, where over-leveraged positions were automatically sold off by exchanges to cover margin calls. This forced selling, amounting to more than $1 billion in a single day, created a vicious cycle: the liquidations pushed prices down further, which in turn triggered even more liquidations. This dynamic was described by one CEO as a necessary “clearing of leverage”, a painful but cleansing process that purges excessive risk from the system. The sharp decline in open interest for Bitcoin futures and funding rates hitting multi-year lows signaled that this speculative excess was being thoroughly squeezed out.
Shifting Sentiment and Selective Opportunities
Unsurprisingly, the violent price action and massive liquidations sent market sentiment plunging. The Crypto Fear & Greed Index hit “Extreme Fear” levels, reflecting the peak nervousness among investors . Within this broad sell-off, the reaction was not uniform. Major altcoins like Ethereum experienced pronounced declines, with the “altseason” indicator weakening significantly as capital shifted toward lower-risk assets.
However, selective rotations revealed where confident capital was still at work. While Solana-based funds remarkably clocked 17 consecutive days of inflows, other projects like Zcash saw substantial gains driven by specific catalysts such as anticipation of its upcoming halving event. This pattern suggests that even during a broad correction, targeted opportunities can emerge based on strong fundamentals and unique value propositions.
