Crypto Market Plunge: Over 220,000 Liquidations Amid Volatility

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The cryptocurrency market experienced a sharp downturn on November 26, sparking widespread concern among investors and traders. Bitcoin briefly dropped below $92,000 per coin, marking a decline of over 6% in 24 hours. Altcoins were hit even harder—Solana, XRP, Dogecoin, and Cardano all plunged more than 10%, triggering massive liquidations across leveraged positions. According to Coinglass data, nearly **226,600 traders** were liquidated within a single day, with total losses approaching **$693 million**.

This sudden market correction highlights the inherent volatility of digital assets and raises critical questions about investor sentiment, macroeconomic influences, and future price trajectories.

Market-Wide Sell-Off Triggers Mass Liquidations

Since the beginning of the week, major cryptocurrencies have undergone significant corrections. Bitcoin retreated from its peak near $98,900 to a low of $91,500. As of Tuesday evening (Beijing time), BTC was trading around $91,600—a 6.69% drop over 24 hours. Ethereum followed closely with a nearly 5% decline, settling at $3,302.

More notably, altcoins bore the brunt of the selloff:

The broader crypto market shed over $180 billion in total market capitalization within days.

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Coinglass data reveals that long positions accounted for the vast majority of liquidations—$587 million** in longs were wiped out compared to just **$106 million in short positions. This suggests that most leveraged traders were betting on continued upside momentum, leaving them vulnerable when sentiment shifted.

Geopolitical Tensions Fuel Risk-Off Sentiment

One of the key catalysts behind the downturn appears to be rising geopolitical uncertainty. On November 25, U.S. President-elect Donald Trump announced plans to impose a 25% tariff on all goods imported from Mexico and Canada, along with a proposed 10% tariff on Chinese imports. These statements reignited global trade tensions, prompting risk-averse behavior across financial markets.

Cryptocurrencies, often perceived as high-beta assets, are particularly sensitive to shifts in macro sentiment. Despite their decentralized nature, they do not exist in a vacuum—when equities wobble and safe-haven demand rises, crypto frequently follows suit.

Michael McCarthy, Market Strategist and Chief Compliance Officer at Moomoo Australia, noted:

“Bitcoin’s price action reflects bubble-like behavior that diverges significantly from traditional valuation models.”

Without underlying cash flows or intrinsic value metrics, crypto prices rely heavily on speculation, liquidity, and investor psychology—making them prone to exaggerated moves during periods of uncertainty.

ETF Inflows Signal Strong Institutional Demand

Despite the recent pullback, institutional interest in Bitcoin remains robust. CoinShares reported that U.S.-based Bitcoin spot ETFs attracted $3.38 billion in inflows during the week of November 18–22—the highest weekly total on record and more than double the previous week’s figure.

This surge in demand helped propel Bitcoin to an all-time high above $99,500** last Friday. However, the rally stalled just shy of the symbolic **$100,000 milestone, leading to rapid profit-taking. Coinglass recorded over $500 million** in futures liquidations following Sunday’s correction, followed by another **$144 million in large-scale clearances during Asian trading hours on Tuesday.

Such patterns indicate strong underlying demand but also highlight the fragility of leveraged positions near key psychological levels.

Will Bitcoin Continue to Fall?

While the current correction has rattled some investors, many analysts believe the long-term bullish trend remains intact. Technical indicators suggest Bitcoin was overbought ahead of the selloff, making a pullback both logical and healthy for sustainable growth.

Adrian Przelozny, CEO of Independent Reserve, stated:

“People have been looking for an excuse to take profits. But we remain confident that positive market sentiment will persist into 2025.”

Prominent crypto investor Michael Novogratz—founder and CEO of Galaxy Digital—echoed this view. He believes Bitcoin will inevitably breach $100,000, though he warns of a potential 20% retracement afterward due to deleveraging.

“Bitcoin is breaking records consistently,” Novogratz said. “Investors should prepare for short-term pullbacks. A drop to $80,000 could represent the absolute bottom before the next leg up.”

He attributes part of this optimism to anticipated regulatory changes under the incoming U.S. administration. Trump, once skeptical of digital assets, has shifted toward strong support—pledging to make America the “global capital of cryptocurrency” through favorable regulations and even proposing a national Bitcoin reserve.

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Jaret Seiberg, an analyst at TD Cowen, noted that after January 20 inauguration, Trump will gain control over the SEC—an agency with significant influence over crypto policy. This could lead to eased enforcement and greater clarity for compliant projects.

A Healthy Correction or the Start of a Downturn?

IG Australia analyst Tony Sycamore emphasized that the recent decline is not a reversal but a necessary correction:

“Markets—even crypto markets—don’t move in straight lines forever. This pullback helps eliminate excessive leverage and overheated conditions.”

With over $7 billion flowing into U.S. Bitcoin ETFs post-election and growing political support for digital assets, the fundamentals remain strong. The current volatility serves as a reminder of crypto’s speculative nature—but also reinforces its role as a dynamic asset class gaining mainstream traction.

Frequently Asked Questions (FAQ)

Q: Why did so many traders get liquidated recently?
A: High leverage combined with rapid price declines triggered automatic margin calls. With Bitcoin dropping sharply from near $99K to below $92K, many over-leveraged long positions were forcibly closed.

Q: Is the Bitcoin bull run over?
A: Most analysts say no. While short-term corrections are expected—especially after record highs—the long-term trend remains bullish due to ETF inflows, institutional adoption, and potential regulatory tailwinds.

Q: Could Bitcoin really fall to $80,000?
A: Some experts like Michael Novogratz see $80K as a possible support level if deleveraging accelerates. However, this would likely present a buying opportunity rather than signal a bearish shift.

Q: How do tariffs affect cryptocurrency prices?
A: Tariff threats increase global economic uncertainty, prompting risk-off behavior. Since crypto is often treated as a speculative asset, it tends to decline when investors seek safer alternatives.

Q: Are Bitcoin ETFs still attracting investment?
A: Yes. U.S. spot Bitcoin ETFs saw record inflows exceeding $3.3 billion in one week alone. Total assets under management now surpass $105 billion.

Q: What role does leverage play in crypto crashes?
A: Excessive leverage amplifies both gains and losses. When prices reverse suddenly, leveraged positions face liquidation cascades—contributing to sharper and faster downturns.

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