Bitcoin's slide toward crucial support thresholds has heightened fears of a wider market downturn, as experts highlight waning interest and inherent weaknesses within the crypto sector. The leading cryptocurrency dipped under $90,000 on Nov. 18—marking its lowest point in seven months—amidst
a 28% drop from its October high
of $126,000. This decline has wiped out nearly $1.5 trillion in market capitalization since October,
with over $2 billion in liquidations
occurring just in the last week. Cryptoquant, a top blockchain analytics provider, has identified this downturn as a possible turning point, cautioning that continued institutional withdrawals and insufficient buying could drive prices down to a significant $40,000 support zone
based on their data
.
This selloff has revealed vulnerabilities in corporate crypto reserves, as companies with substantial
Bitcoin
and
Ethereum
holdings are now facing steep unrealized losses.
Publicly listed digital asset treasury firms
(DATs), which benefited from the 2024 bull market, have now seen their valuations cut in half since July.
Strategy
Inc., the largest corporate holder of Bitcoin with 649,870 BTC, has experienced a 35% share price drop over the past month,
even though it still holds $6.1 billion in unrealized gains
on its assets. Bitmine, the top Ethereum-focused DAT, owns 3.56 million ETH but is now facing a $4.52 billion unrealized deficit as
ether
trades at its lowest in several months
according to recent findings
. At the same time, Forward Industries, which made significant investments in
Solana
, is dealing with a $711 million loss on its 6.83 million
SOL
tokens after a 32% price decline
as per analysis
.
The downturn has also impacted exchange-traded funds.
Bitcoin ETFs listed in the U.S. have seen $3.79 billion in outflows
this month, with BlackRock's IBIT alone accounting for $1.26 billion in withdrawals.
Analysts at JPMorgan caution
that ongoing regulatory ambiguity—such as the possible removal of crypto-heavy stocks from major indices like MSCI—could worsen the situation for companies like Strategy and FG Nexus, which have already begun selling crypto assets to finance share buybacks.
The Coinglass Fear & Greed Index
has plunged to its most pessimistic reading since the 2022 crypto downturn.
Recent regulatory and institutional actions have provided little relief for the market. Although
the U.S. Comptroller of the Currency has recently permitted
banks to include crypto on their balance sheets, and
Fidelity's launch of a Solana ETF
indicated ongoing institutional interest, these developments have not been enough to counteract broader economic pressures. The Federal Reserve's postponement of interest rate cuts and increased volatility in the stock market have further fueled risk aversion.
Mastercard's collaboration with Polygon
to streamline crypto payments and
Japan's favorable tax policies
for DATs offer some optimism, but these positives are currently overshadowed by the persistent wave of liquidations.
Experts remain split on what lies ahead. While
some, such as Tony Sycamore from IG Australia, believe
the market may look to Michael Saylor's Strategy Inc. for signs of recovery, others think the selloff is being fueled by long-term holders cashing out. "The combination of forced liquidations and ETF-driven selling has left the market in an especially fragile position," said
Chris Newhouse of Ergonia
, a DeFi research organization. With Bitcoin experiencing its longest sequence of consecutive lower lows since 2010, the next few weeks will be crucial in determining whether this is a temporary correction or the onset of a more prolonged bear market.
