In the first week of November, the sentiment in the cryptocurrency market is quite poor. Bitcoin is nearing the low point of the "10.11" crash, and ETH has also fallen below $3,500. Aside from the privacy sector maintaining high levels, other sectors in the cryptocurrency market are experiencing a waterfall decline, with over $1 billion in liquidations in the past 24 hours, which seems to have become a common occurrence.

There are certainly some reasons for the decline, let's look back.

Industry Internal

For two consecutive days, projects have encountered issues. On November 3, the well-known DeFi project Balancer was hacked for $116 million due to a code problem. Balancer is a foundational DeFi project, even older than Uniswap, and such a code issue is a significant blow to the industry.

On November 4, a wealth management platform named Stream Finance collapsed, with the official report stating a loss of $93 million. The problem is that it is unclear how the loss occurred, and the official statement did not clarify. The community speculates that it happened on the day of the "10.11" crash.

There is only so much money in the cryptocurrency market, and in these two days, it has decreased by another $200 million.

From a Macro Perspective

If we look at the global capital markets, on November 4, the entire world was in decline, with even the newly high Japanese and Korean stocks falling, and U.S. stocks also dropping in pre-market trading.

First, there is the interest rate cut. Last Wednesday, the Federal Reserve spoke, and the likelihood of a rate cut in December seems to have decreased, indicating that there is no urgent need to cut rates.

Then, ETFs are also experiencing net outflows. Last week, the net outflow from Bitcoin's U.S. stock ETF was $802 million, and on Monday, November 3, there was another net outflow of $180 million.

On November 5, there is another event: the U.S. Supreme Court will hold oral arguments for the "tariff trial," reviewing the legality of Trump's global tariffs. The uncertainty lies in the possibility that if the final ruling opposes Trump, the tariffs could be canceled, leading to new policy adjustments.

The U.S. federal government "shutdown" has entered its 35th day, tying the record for the longest "shutdown" in U.S. history. The government closure has led institutions to hedge against high-risk assets, triggering sell-offs.

Judgment on the Bottom of the Decline

Glassnode has expressed a market view stating that the market continues to struggle above the short-term holding cost price (approximately $113,000), which is a critical area for the momentum clash between bulls and bears. If it fails to regain this level, it may further drop to the actual price of active investors (approximately $88,000).

CryptoQuant CEO Ki Young Ju released a series of on-chain data last night, indicating that the average cost of Bitcoin wallets is $55,900, meaning holders are averaging a profit of about 93%. On-chain capital inflow remains strong, but the price cannot rise due to weak demand.

10x Research CEO Markus Thielen stated after the market decline that Bitcoin is approaching the support line since the crash on October 10. If it falls below $107,000, it may drop to $100,000.

Chinese crypto KOL Banmuxia publicly stated today that "the traditional four-year cycle bull market has ended, Bitcoin will gradually fall to $84,000, then experience several months of complex fluctuations, and by the end of next year or early the following year, it will follow the U.S. stock market's bubble to surge to $240,000."

Currently, the only good news seems to be that historically, Bitcoin has averaged gains in November.

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