Crypto Market Plummets: Bitcoin and Ethereum Lead the Downturn Amid Macroeconomic Concerns

Cryptocurrency markets continue to face declines this November, as the global market cap plunges from approximately $4.27 trillion to around $3.25 trillion, marking a significant low over the past six months. Notably, Bitcoin and Ethereum have witnessed a sharp fall of about 22.5% and 35.5% respectively from their all-time highs. Investors are bracing for potential further declines in altcoins, with financial giant JPMorgan suggesting a critical support level for Bitcoin at $93,500.

The prevailing sentiment among investors remains deeply bearish as the Crypto Market Fear & Greed Index lingers in the “extreme fear” zone, registering a score of 14. This level of pessimism signals the potential for more downward pressure on cryptocurrency prices.

Over the last 24 hours, several top altcoins, including XRP, Binance Coin (BNB), Solana (SOL), Cardano (ADA), Zcash (ZEC), and various AI-driven coins, have recorded losses ranging between 5% and 11.5%. Meme-inspired cryptocurrencies, such as Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe Coin (PEPE), have also surrendered prior gains, with PEPE showing an 81.5% decline year-to-date.

Amidst these market shifts, macroeconomic concerns have emerged as a key factor influencing investor behavior. In the United States, President Donald Trump took legislative action to conclude a prolonged government shutdown after 42 days. Despite this, economic data releases, including the Consumer Price Index (CPI) and employment figures for October, remain unavailable, adding to market uncertainty.

Comments by Federal Reserve officials, including Neel Kashkari, have highlighted the risk of inflationary pressures, further complicating economic recovery prospects in the wake of the government shutdown. Consequently, market participants have adjusted their expectations around potential Federal Reserve rate cuts in December. The CME FedWatch tool indicates a decrease in the probability of an additional 25 basis-point rate reduction, slipping from 62.5% to 51.5%.

The looming expiration of $4.75 billion in Bitcoin and Ethereum options is also contributing to the market volatility. Specifically, over 41,000 BTC options with a notional value of around $3.95 billion are set to expire on Deribit. This scenario is reflected in a put-call ratio of 0.69 and a maximum pain price at nearly $104,000. Moreover, a put/call ratio of 1.09 in recent trades underscores a defensive posture among traders, as they prepare for Bitcoin dropping under $94,600.

Parallel concerns affect Ethereum, with more than 234,000 options nearing expiration, carrying a notional value of about $740 million and a put-call ratio of 0.67. Although the put volume has noticeably increased, it remains outpaced by call volumes exceeding 98,000. The current maximum pain threshold stands at $3,450, significantly above Ethereum’s present market valuation of $3,100, prompting some traders to position for potential further downside under $2,950.

Additionally, a shift in institutional investment trends is notable, as outflows intensify in Spot Bitcoin and Ethereum ETFs. Institutional investors appear to redirect assets towards Solana and XRP, with the Canary XRP ETF (XRPC) experiencing significant inflows of $58 million and $243 million upon its launch.

Data from Farside Investors reveals that Bitcoin ETFs collectively saw net withdrawals of approximately $860.5 million. Major funds like BlackRock’s IBIT and the Grayscale Bitcoin Mini Trust ETF recorded outflows of $254.8 million and $316.7 million, respectively, indicating waning institutional appetite. Ethereum ETFs encountered similar conditions, with net outflows reaching around $257.3 million, marking the third consecutive daily decline.

The downturn is further accentuated by actions from long-term holders (LTH) and cryptocurrency whales, who continue leveraging profit-taking strategies. Historical trends suggest Bitcoin tends to peak 12 to 18 months post-halving, following a bullish cycle that culminates roughly 1,060-1,065 days after the event. Consequently, recent Coinglass data highlights over $1.09 billion in crypto liquidations, affecting 236,000 traders in the process.

In this environment, Ethereum, Solana, XRP, ZEC, and other altcoins are undergoing substantial liquidation, while the collective downward pressure persists on Bitcoin, which fell over 5.5% to reach an intraday low of $96,600. Ethereum dropped roughly 9.5% to $3,090, and XRP retracted around 7.5% to $2.25. ZEC’s decline is also noteworthy, falling 3.5% to $483.75, almost 39% below its highest peak following a significant parabolic ascent. Industry experts remain cautious, as market volatility shows no immediate signs of abating, leaving the door open for further price reductions across the crypto landscape.