Crypto Market Decline Continues Through November as Bitcoin, Ethereum, and Altcoins Depths}
There was a continued decline throughout November, as global market capitalization sank from \$4.28 trillion to a \$3.27 trillion global market capitalization that was a six month low. Bitcoin and Ethereum saw respective declines of 23 and 36 percent as traders expect altcoins to decline even further. Recent reports from JPMorgan see a BTC support point of \$94,000.
The investor sentiment and Cryptocurrency market outllok remain pessimistic, as Crypto Fear and Greed Index fell to 15, to an extreme fear of further drops.
Meme Coins and Altcoins Underperformed
Top altcoins such as XRP, BN, SOL, ADA, ZEC and AI speculative tokens decreased 5-12 percent. Meme coins such as DOGE, SHIB and PEPE have also declined, PEPE has eroded an 80 percent increase in year to date value.
Economic Conditions Will Cause The Collapse.
The US government’s 43-day shutdown was followed by a series of US economic indicators, including consumer price index and employment data that are yet to be released. F First, Minister of Finance, Neel Kashkari, reported that inflation was increasing and that the market was less likely to have a reduction in the interest rate.
The market has priced a 25 basis point cut in rates at 52.1%, a clear reflection of the more hawkish stance by the Federal Reserve Chair Jerome Powell. On the other hand, the Dollar Index dropped to 99 and the 10 Year Treasury yield stood at 4.1%.
4.7 Billion Dollar Expiration of BTC and ETH Options
The market’s volatility has been exacerbated by the expiring of 4.7 Billion in options. On the BTC side, more than $4 billion worth of options are expires on Deribit along with a 0.7 put call ratio and max pain at $105,000. The volume of options to the downside has signficantly exceeded that to the upside suggesting that traders expect BTC to close below $95,000.
ETH also faced similarly large expiries at $738 Million with 233K options were expiring. The put volume doubled in the last 24 hours even tho it was still significantly lower in comparison to the call volume. The max pain point was at $3500 which was above the current market price of $3175, which has led traders to buy more put options in anticipation of ETH below 3000.
Institutional Caution mirrored in Bitcoin and Ethereum ETFs
The current caution exhibited by institutions is demonstrated by the spot Bitcoin and Ethereum ETFs outflows recently. Net outflows of $866.7 million were seen in Bitcoin ETFs, driven by outflows of $318.2 million from Grayscale’s Bitcoin Mini Trust and $256.6 million from BlackRock’s IBIT. Etheruem ETFs also saw $259.6 million outflows, from $137.3 million BlackRock ETHA. Meanwhile, institutions appear to be rotating to Solana and XRP as the Canary XRP ETF (XRPC) recorded $245 million inflow on its debut.
Profit Taking by Long Term Holders and Whales
October saw peaks on BTC, leading to profit taking from Long Term Holders (LTH) and whales. In the past 24 hours, $1.1 billion worth of liquidations were recorded, impacting 237k traders according to Coinglass data. The largest liquidations took place in BTC ($96,840, down 5% to ETH $3,112, down 10%), XRP ($2.28, down 8%), ZEC ($485.20, down 4%). and other alts including SOL, DOGE, ADA, and ZEC. This is ZEC’s first drop since it hit $485 shortly after its ATH.
Outlook
A continous bearish momentum is to be expected as buyer support for dips seems to be fading according to many in the industry. 10x Research highlights that since the 10th of October, BTC, and ETH trend models have remained firmly bearish, suggesting that there is more downward movement to be expected.
