BTC and ETH Crash: Key Reasons for Price Drop Now

The cryptocurrency markets are experiencing severe turbulence. Bitcoin has crashed to $101,099 and Ethereum dropped to $3,363 as of November 4, 2025. Both assets marked their worst October performance in years. Moreover, over $1.34 billion in leveraged positions got wiped out in just four trading days. Meanwhile, investors are panicking as digital assets plunge harder than traditional markets.

But here’s the real question: should you be worried about your crypto holdings?

Bitcoin price movement showing the sharp decline from October peak to November lows, marking the worst October performance in a decade

Understanding What’s Happening with Bitcoin and Ethereum Prices

The current market crash stems from multiple factors working together. First, Bitcoin posted its worst October in a decade, losing 3.69% during a month that historically delivers 19.92% gains on average. This broke a remarkable seven-year “Uptober” streak.

Additionally, Ethereum fell even harder. The second-largest cryptocurrency dropped 30% from its 2025 peak of $4,955. Currently trading around $3,363, ETH reached its lowest level in nearly three months. Similarly, other major cryptocurrencies like Solana, XRP, and Cardano experienced declines between 5% to 10% during the same period.

Ethereum price chart showing the steep 30% decline from October highs to November lows, with significant ETF outflows contributing to selling pressure

Federal Reserve Policy Creates Major Headwinds

The Federal Reserve’s recent statements caused significant market disruption. Fed Chair Jerome Powell cut rates by 25 basis points on October 29, bringing the benchmark rate to 3.75%-4%. However, Powell’s cautious tone dampened hopes for further easing.

Specifically, Powell emphasized that a December rate cut isn’t guaranteed. This single comment crushed market expectations. According to CME FedWatch Tool data, the probability of a December rate cut collapsed from 96% to below 70%. Consequently, risk assets like cryptocurrencies took an immediate hit.

Furthermore, inflation remains “somewhat elevated” according to the Fed statement. This creates uncertainty about future monetary policy. Therefore, investors moved away from non-yielding assets like digital currencies.

Massive Liquidations Signal Overleveraged Markets

The scale of forced liquidations tells a troubling story. Over $1.36 billion in crypto positions got liquidated within 24 hours on November 3. This affected approximately 327,000 traders across major exchanges.

Notably, long positions dominated these liquidations. Nearly 90% of wiped-out positions were bullish bets, totaling $1.21 billion. Bitcoin alone saw $411 million in liquidations, while Ethereum accounted for $355 million.

Crypto market liquidations showing $1.34 billion wiped out over four trading days, with long positions accounting for 90% of total liquidations

Which Exchanges Saw the Biggest Losses?

Several platforms experienced concentrated liquidation events:

Hyperliquid led with $397 million (98% long positions)
Bybit recorded $335 million in forced closures
Binance saw $242 million liquidated
HTX witnessed $150 million in losses

The largest single liquidation occurred on HTX. A massive $47.87 million BTC-USDT position got automatically closed. This demonstrates how quickly leveraged trades unravel during volatility spikes.

ETF Outflows Show Institutional Retreat

Institutional investors are pulling back from crypto exposure. Spot Bitcoin ETFs experienced $1.34 billion in outflows over four consecutive trading days since October 29. Similarly, Ethereum ETFs lost nearly $500 million during the same period.

BlackRock’s IBIT, Fidelity’s FBTC, and Grayscale’s GBTC led these redemptions. On November 3 alone, Bitcoin ETFs recorded $187 million in net outflows. Meanwhile, Ethereum ETFs shed $136 million.

These numbers matter because ETF flows represent institutional demand. When major funds exit, it signals declining confidence among professional investors. Therefore, retail investors should pay attention to these trends.

Market Sentiment Turns Fearful

The Crypto Fear and Greed Index provides insight into investor psychology. Currently sitting at 21-35, the index remains firmly in “Extreme Fear” territory. This represents a dramatic shift from the neutral readings observed just weeks earlier.

Additionally, the Net Unrealized Profit/Loss (NUPL) metric dropped to 0.47. This marks the lowest level since April 2025. Historically, NUPL readings below 0.42-0.44 have preceded further price weakness. Thus, technical indicators suggest more downside potential exists.

Technical Analysis Shows Critical Support Levels Breaking

Bitcoin’s price action reveals concerning technical developments. The cryptocurrency broke below its 200-day moving average at $109,840. This key indicator serves as a long-term trend gauge. Therefore, trading 5.1% below this level signals fragile support.

Similarly, Ethereum confirmed a technical bear market. Prices now sit 30% below the 2025 peak. The death cross pattern—where short-term moving averages cross below long-term ones—has materialized on ETH charts.

Where Could Prices Go Next?

Technical analysts warn of potential further declines:

Bitcoin faces immediate support at $100,000, with possible drops to $92,000-$94,000
Ethereum shows support between $3,649-$3,686, but could test $3,510 if selling accelerates
Breaking below these levels could trigger additional liquidation cascades

However, some experts see the $103,000-$107,000 range as critical for Bitcoin. A sustained break below this zone would confirm bearish momentum.

Why This Crypto Correction Differs from Previous Crashes

Several factors distinguish this downturn from earlier market events:

First, the October 10 flash crash liquidated $19.1 billion in positions—the largest event on record. The current selloff, while significant, remains smaller in scale. This suggests some leverage already cleared from the system.

Second, institutional adoption continues despite price weakness. Companies like MicroStrategy still accumulate Bitcoin. For instance, they purchased 397 BTC for $45.6 million between October 27 and November 2. This demonstrates long-term conviction among corporate treasuries.

Third, regulatory clarity has improved substantially. The GENIUS Act passed in July 2025, providing framework for stablecoins. Moreover, institutional products like spot Bitcoin ETFs enable mainstream access. Therefore, infrastructure supporting digital assets remains strong despite price volatility.

Understanding Whale Activity and Long-Term Holders

On-chain data reveals interesting holder behavior. A dormant Bitcoin wallet moved 10,000 BTC after nearly 14 years of inactivity. The holder likely sold the entire amount for approximately $1 billion, marking one of the largest profit-taking events from an early address.

Meanwhile, the Holder Accumulation Ratio for Ethereum slipped to 29.79%—its second-lowest level in a month. This indicates long-term holders are reducing exposure or waiting for better entry prices. However, strong support clusters exist between $3,649-$3,686 for ETH, where 1.09 million coins were last transacted.

Should You Panic About Your Crypto Holdings?

Let’s address the core question directly. Market corrections are normal in cryptocurrency cycles. Bitcoin has experienced numerous 30-50% drawdowns throughout its history. Each time, patient holders who understood the technology eventually saw recovery.

However, this doesn’t mean prices will immediately bounce back. Several scenarios could unfold:

Best Case Scenario

Markets stabilize as leverage resets. Institutional buying resumes once uncertainty around Fed policy clears. Historical November performance suggests potential for recovery—ETH has averaged 6.93% gains in November historically.

Moderate Case Scenario

Prices consolidate in current ranges for weeks or months. Accumulation occurs gradually as weak hands exit. December clarity on Fed policy provides direction.

Challenging Case Scenario

Further declines test lower support levels. Bitcoin drops toward $92,000-$94,000, while Ethereum revisits $3,400-$3,500. This would represent healthy correction within longer-term uptrend.

What Smart Investors Are Doing Right Now

Instead of emotional reactions, experienced investors focus on fundamentals:

Dollar-Cost Averaging: Rather than timing the bottom, they buy fixed amounts regularly. This strategy reduces entry price over time.

Risk Management: They avoid leverage during volatile periods. The current liquidation cascade shows why borrowed money amplifies losses.

Due Diligence: They research projects fundamentally. Strong ecosystems like Ethereum’s DeFi applications or Bitcoin’s store-of-value narrative remain intact regardless of short-term prices.

Long-Term Perspective: They remember that all major bull markets included significant corrections. The 2024 rally saw multiple 20%+ pullbacks before reaching new highs.

Key Factors to Monitor Going Forward

Several developments will determine near-term market direction:

Federal Reserve Meetings: The December 9-10 FOMC meeting will clarify rate policy. Any surprises could trigger volatility.

ETF Flow Trends: Whether institutional outflows continue or reverse matters significantly. Stabilizing or positive flows would signal renewed confidence.

On-Chain Metrics: Watching accumulation patterns, exchange inflows/outflows, and holder behavior provides early signals.

Regulatory Developments: Ongoing clarity around digital asset frameworks supports long-term adoption regardless of price action.

Macro Environment: Broader economic conditions, inflation data, and geopolitical events influence risk appetite for speculative assets.

How Leverage Amplifies Market Moves

The current situation highlights leverage risks in crypto trading. When prices moved against overleveraged positions, automatic liquidations created cascading effects. This forced selling drove prices lower, triggering more liquidations in a feedback loop.

Exchanges automatically close leveraged positions when margin falls below required levels. During thin liquidity periods—like weekends or overnight hours—these liquidations cause exaggerated price swings. Therefore, conservative investors avoid high leverage multiples.

Historical Context Provides Perspective

Crypto markets have weathered worse storms. The 2018 bear market saw Bitcoin drop 84% from peak to trough. The 2022 crypto winter brought similar declines. Yet each cycle, the industry emerged with stronger infrastructure and broader adoption.

Comparing to traditional markets helps too. Stock markets experience 5-10% corrections regularly. Crypto’s higher volatility means 20-30% swings occur more frequently. Investors comfortable with this volatility fare better than those expecting smooth appreciation.

The Role of Stablecoins and Market Infrastructure

Interestingly, stablecoin infrastructure continues strengthening despite price weakness. Over 84% of institutions utilize or express interest in stablecoins for yield generation and transactional convenience. This represents maturation beyond speculative trading.

Additionally, tokenization of real-world assets progresses steadily. Some 76% of surveyed firms plan to invest in tokenized assets by 2026. These developments suggest the underlying blockchain revolution continues regardless of cryptocurrency price fluctuations.

What This Means for Different Investor Types

New Investors: This volatility demonstrates why crypto requires strong conviction and risk tolerance. Only invest amounts you can afford to lose completely. Moreover, avoid leverage until you deeply understand the technology.

Experienced Traders: Market dislocations create opportunities. However, catching falling knives is dangerous. Wait for clear reversal signals before aggressive positioning.

Long-Term Holders: Dollar-cost averaging during corrections has historically proven effective. If your investment thesis remains valid, accumulation during fear phases makes sense.

Institutional Allocators: Temporary volatility shouldn’t override strategic positioning. Digital assets increasingly correlate with innovation themes regardless of short-term price action.

Conclusion: Staying Rational During Market Turbulence

The current crypto market crash stems from overleveraged positions, Federal Reserve policy uncertainty, and institutional profit-taking. Bitcoin and Ethereum have experienced significant declines from recent highs. Furthermore, massive liquidations demonstrate the risks of excessive leverage.

Nevertheless, panic rarely serves investors well. The technology and adoption trends supporting digital assets remain intact. Regulatory clarity continues improving. Infrastructure development proceeds steadily. Therefore, this correction might represent a healthy reset rather than fundamental breakdown.

Focus on what you can control: risk management, position sizing, and long-term strategy. Avoid emotional decisions driven by fear or greed. Similarly, never invest more than you can afford to lose in such volatile assets.

Whether you’re worried depends on your individual circumstances. If you invested money needed for rent or emergencies, yes—you should reconsider your risk tolerance. However, if you maintained appropriate position sizes with long time horizons, short-term volatility becomes less concerning.

Remember: markets are subject to rapid change. Past performance doesn’t guarantee future results. Always conduct your own thorough research before making investment decisions.

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Disclaimer: This analysis is for educational and informational purposes only. We do not encourage users to buy, sell, or hold any cryptocurrencies or securities. Markets are subject to significant volatility and risk. Always conduct your own due diligence and consult with qualified financial advisors before making investment decisions. Cryptocurrency investments carry substantial risk of loss.

Sources

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