Altcoin Bloodbath: Bitcoin Tests $100K Support as $1 Trillion Wiped From Crypto Market

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TL;DR

• The cryptocurrency market loses over $1 trillion in capitalization as Bitcoin tests the critical $100,000 support level for the first time since June 2025
• Altcoins suffer disproportionately, with Ethereum plunging 16% in 48 hours and breaking its 200-day EMA
• $1.7 billion in liquidations sweep the market, split 76% long positions, as old BTC whale selling pressure intensifies
• Fed Chair Powell’s hawkish tone crushes December rate cut expectations from 96% to 69.3%
• Privacy tokens like Monero (XMR) defy the trend, surging 7% as the only sector in the green

The Sell-Off That Shook Crypto

November 5, 2025 marks one of the most brutal days for cryptocurrency markets this year. The total crypto market capitalization plunges by more than $1 trillion from early October highs, as a cascading wave of liquidations and institutional outflows sends shockwaves across every major digital asset.

Bitcoin hovers precariously around $101,000 after touching the psychologically critical $100,000 level — a price not tested since June. The flagship cryptocurrency records an 8% decline over two consecutive days of relentless selling, briefly dipping below six figures before recovering modestly.

Ethereum fares far worse. The second-largest cryptocurrency endures a punishing 16% two-day crash, briefly trading at $3,303 before finding thin support near the 50% Fibonacci retracement level at $3,175. The dramatic slide breaks ETH below its 200-day exponential moving average and shatters the consolidation range established since July, decisively handing control to the bears.

What Triggered the Carnage

The catalyst traces back to Federal Reserve Chairman Jerome Powell, whose hawkish remarks effectively dismantle market expectations for a December interest rate cut. The probability of a December rate reduction collapses from 96% before Powell’s press conference to just 69.3% afterward, dealing a severe blow to the risk-on sentiment that had propelled crypto to record highs.

But monetary policy tells only part of the story. On-chain analysis reveals significant old Bitcoin whale selling pressure, with billions gradually entering the market over several days. Paul Howard from Wincent characterizes the selling as methodical rather than panic-driven: “Dumping billions gradually into the ecosystem over the course of the last few days is not panic selling.”

The crypto collapse also coincides with a broader technology stock sell-off. Palantir drops 8% despite beating earnings on valuation concerns, while Nvidia sheds 4%, erasing $200 billion in market capitalization. The Nasdaq falls 2% and the S&P 500 declines 1.2%, reflecting growing anxiety about AI-driven stock valuations spilling over into digital assets.

Altcoins Bear the Brunt

While Bitcoin struggles to hold $100,000, the altcoin market suffers far more severe damage. Several tokens retrace their entire rallies from July and August, effectively erasing months of gains in a matter of days.

The CoinDesk 20 Index, measuring the largest cryptocurrencies, trades 2.5% lower over 24 hours. Tokens like OKB, SKY, and FLR print relative strength index (RSI) readings as low as 23 out of 100, placing them deep in oversold territory. The average crypto RSI sits at just 38, suggesting extreme bearish momentum across the board.

Ethereum leads notional liquidation losses with $572 million wiped out. The average daily long liquidation volume over the two-day crash reaches $1 billion, significantly exceeding the seven-day average of $620 million and confirming the devastating impact of forced selling on price action.

The derivatives market reflects rising caution across the board. Bitcoin futures open interest declines to $25.3 billion from $26 billion the previous week, as traders systematically reduce leverage. The three-month annualized basis suppresses to just 3–4%, signaling that the basis trade has become largely unappealing. Funding rates remain mixed but low at 4–9% annualized, reinforcing the absence of strong trend commitment.

Institutional Investors Head for the Exits

The institutional exodus adds another layer of pressure. Bitcoin ETFs record $1.15 billion in outflows during the preceding week, with BlackRock, ARK Invest, and Fidelity leading the retreat. These are the same traditional financial giants that drove Bitcoin’s rally to $126,000 in early October, now reducing exposure amid Federal Reserve uncertainty.

The Bitcoin options market displays volatile but interesting signals. Implied volatility runs high across all expiries, with the IV term structure showing near-term backwardation before resuming long-term contango. Despite the chaos, the 24-hour put-call volume flips bullish at 58–42% in favor of calls, suggesting some traders position for a rebound.

Privacy Coins Defy the Trend

In a notable contrarian move, privacy tokens emerge as the sole bright spot in the market. Monero (XMR) surges 7% on the day while the broader market bleeds, with the entire privacy coin sector maintaining significant gains over the past month. Decred (DCR) and Zcash (ZEC) cool off after recent rallies, but the privacy narrative remains the strongest thematic driver in an otherwise devastated market.

Why This Matters

This correction represents a critical stress test for the 2025 crypto bull market. The combination of macro headwinds from Fed hawkishness, old whale distribution, institutional ETF outflows, and cascading liquidations creates a perfect storm that challenges the thesis of an ongoing “altcoin season.” Multiple analysts now question whether the brief altcoin rally from July and August was merely a bull trap.

For traders, the key levels to watch are Bitcoin’s $99,000 support and Ethereum’s $3,100 floor. A decisive break below these levels opens the door to significantly deeper corrections — potentially toward $92,000–$94,000 for BTC and $2,760–$2,650 for ETH. However, the deeply oversold RSI readings across the altcoin market suggest a short-term relief rally remains possible if support holds.

As Joel Kruger, strategist at LMAX, frames it: “This remains a healthy correction within an ongoing bull market, not a bearish shift.” Whether that assessment proves correct depends entirely on whether Bitcoin can defend six figures in the days ahead.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency markets are highly volatile, and past performance does not guarantee future results. Always conduct your own research and consult a qualified financial advisor before making investment decisions.

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