Bitcoin is heading toward its worst monthly performance in more than three years, echoing the turbulence that followed the collapse of major crypto firms in 2022.
The world’s largest cryptocurrency fell as much as 6.4% to $81,629 on Friday before recovering slightly to trade at $84,166 as of 7:42 a.m. London time.
Ether, the second-largest digital asset, also plunged, dropping 7.6% to below $2,700.
According to Bloomberg data, Bitcoin has shed about 23% of its value in November alone, marking its sharpest monthly decline since June 2022.
Echoes of past crises: TerraUSD and FTX
The current downturn draws parallels with the implosion of Do Kwon’s TerraUSD stablecoin in May 2022, which triggered a chain reaction of corporate failures across the crypto sector.
That crisis culminated in the dramatic collapse of Sam Bankman-Fried’s FTX exchange, shaking investor confidence worldwide.
Despite a pro-crypto stance from the White House under U.S. President Donald Trump and growing institutional adoption, Bitcoin has now fallen more than 30% from its record high reached in early October.
Liquidations fuel market rout
The sell-off has been exacerbated by massive liquidations. On October 10, leveraged token bets worth $19 billion were wiped out, erasing approximately $1.5 trillion from the combined market capitalization of cryptocurrencies.
The pressure has only intensified in the past 24 hours, with CoinGlass reporting an additional $2 billion in leveraged positions liquidated.
Institutional appetite for Bitcoin appears to be waning. A group of 12 U.S.-listed Bitcoin exchange-traded funds (ETFs) recorded $903 million in net outflows on Thursday, marking their second-largest single-day redemption since their launch in January 2024.
Meanwhile, open interest in perpetual futures has dropped 35% from its October peak of $94 billion, signaling reduced speculative activity.
The wider financial markets have offered little support. U.S. equities, which recently rallied on optimism around artificial intelligence following strong earnings from Nvidia Corp., have since retreated. Concerns over stretched valuations and uncertainty about a potential Federal Reserve rate cut in December have weighed heavily on investor sentiment.
Market observers remain cautious about the depth of the current downturn.
“Sentiment across the board is incredibly poor. There appears to be a forced seller in the market and it is unclear how deep this goes,” said Pratik Kala, portfolio manager at Australia-based hedge fund Apollo Crypto.
As of November 3, Bitcoin was trading around $107,500 despite a 2.2% decrease, as investors were waiting for key US jobs data.
At the time, Ethereum fell 3% to approximately $3,750, while other altcoins performed poorly amid low trading volumes.
