BTC briefly fell below $100,000. Why the continuous decline? Has the bull market ended?

Shaw, Jinse Finance On November 5th, crypto assets such as Bitcoin and Ethereum continued their weak performance, experiencing a sustained decline. Bitcoin fell below the $100,000 mark for the first time since June, briefly dipping below $99,000 in the early morning, a 24-hour drop of over 7%; Ethereum briefly fell below $3,100 in the early morning, a 24-hour drop of over 13%. Major altcoins such as BNB and SOL also continued their sharp declines. Bitcoin and Ethereum subsequently rebounded slightly. In the past 24 hours, a total of $2.028 billion in positions were liquidated across the entire network, including $1.628 billion in long positions and $399 million in short positions. Just one month after Bitcoin hit a new high, the crypto market is showing clear signs of weakness, especially after entering November, with widespread pessimism and frequent pronouncements that the "bull market is over." What factors have negatively impacted the market, and has the bull market truly ended? I. BTC Breaks Below the Important $100,000 Support Level, Crypto Market Weakness Continues Bitcoin, Ethereum, and other crypto assets continued their weak trend on November 5th, continuing their decline. Bitcoin fell below the $100,000 mark for the first time since June, briefly dipping below $99,000 in the early hours of the morning, reaching a low of $98,944, a 24-hour drop of over 7%. Ethereum also briefly fell below $3,100 in the early hours of the morning, reaching a low of $3,057, a 24-hour drop of over 13%. Major altcoins such as BNB and SOL also continued to fall sharply. Bitcoin and Ethereum subsequently rebounded slightly, with Bitcoin recovering to around $101,000 and Ethereum to around $3,300. Coinglass data shows that in the past 24 hours, a total of $2.028 billion in positions were liquidated, affecting over 472,000 people. Of these, $1.628 billion were long positions liquidated and $399 million were short positions liquidated, with long positions being the primary target. ETH liquidations totaled $657 million, BTC liquidations totaled $614 million, and SOL liquidations totaled $124 million. Since the massive sell-off on October 11th, the largest crash in history, the crypto market has lacked sufficient momentum for a rebound, even briefly falling below the key support level of $100,000 early this morning. While many remain bullish on crypto assets until the end of the year, the persistent downward pressure casts a significant question mark over whether the crypto bull market can continue. II. ETF and DAT Treasury Funds Withdraw, Market Loses Major Driving Force Since the beginning of November, ETFs have experienced continuous net outflows, and funds from digital asset treasury (DAT) reserve companies have also withdrawn. According to Lookonchain monitoring, in the first two days of this week, 10 Bitcoin ETFs saw a net outflow of 3,710 Bitcoins (worth $393.67 million), and 9 Ethereum ETFs saw a net outflow of 59,855 Ethereums (worth $216.45 million). Farside Investors data shows that last week, US Bitcoin spot ETFs saw a net outflow of $799 million, and Ethereum spot ETFs saw net outflows for three consecutive days, totaling $363 million. The purchasing pace of Bitcoin treasury companies, represented by Strategy, has slowed significantly. Strategy added approximately 43,000 bitcoins in the third quarter, its lowest quarterly purchase this year. US-listed semiconductor company Sequans Communications redeemed 50% of its convertible bonds by selling 970 bitcoins. This transaction reduced the company's total debt from $189 million to $94.5 million. Sequans currently holds 2,264 bitcoins, down from 3,234 previously. At current market prices, the company's net asset value in bitcoins is approximately $240 million, and its debt-to-net-worth ratio decreased from 55% to 39%. Japanese bitcoin treasury company MetaPlanet recently saw its share price fall below the market value of its bitcoin holdings after a significant decline. According to official news, MetaPlanet has completed a share buyback program of 150 million common shares. ETFs and DAT treasury are two major drivers of this bull market. The cautious wait-and-see attitude and capital outflow of institutional investors have resulted in insufficient upward momentum in the crypto market, leading to a continued decline. (See Jinse Finance's previous article, "BTC's Largest Buyer Stops Large-Scale Buying, ETF Fund Inflows Weak: Are These Reasons for BTC's Sharp Decline?") III. Frequent Trading of Leveraged Whale Contracts, Large Long Positions Liquidated During the continued decline in the crypto market, large long positions previously held by whale investors were liquidated again. Chain analyst Ai Yi (@ai_9684xtpa) monitored that the remaining long positions of the previously "100% win rate whale" were liquidated at a loss in the early hours of today, resulting in a loss of $39.37 million. BTC briefly fell below $100,000, and ETH dropped to $3,057, quickly reaching its liquidation threshold. Long positions initiated on October 24th accumulated losses of $39.906 million, bringing the total account loss to $30.02 million. Chain analyst Yu Jin monitored that a whale who had previously used a revolving lending method to hold a total of 1,320 WBTC (approximately $132 million) had its position nearing liquidation after the market decline. To mitigate risk, this whale sold approximately 465.4 WBTC and 2,686 ETH this morning, obtaining approximately $56.52 million USDC to repay part of the loan. Lookonchain monitoring also showed that "Brother Machi" Huang Licheng's long positions were completely liquidated again. His account balance now stands at only $1,718. Furthermore, Onchain Lens monitoring revealed that a whale deposited 3.5 million USDC into HyperLiquid and shorted BTC and ETH with 20x leverage. Whale investors frequently engage in contract trading with high leverage, significantly exacerbating short-term volatility in the crypto market. Large-scale long position liquidations have added stronger downward momentum to crypto assets, further aggravating market fragility. Fourth, macroeconomic factors such as the US government shutdown and the unresolved Fed rate cuts are draining liquidity. The US government shutdown crisis continues, with no signs of a resolution. According to Xinhua News Agency, the US Senate failed to pass a temporary federal government funding bill again on the 4th, meaning this round of federal government shutdown is about to break the historical record of 35 days set at the end of 2018 and the beginning of 2019, becoming the longest government shutdown in US history. The Congressional Budget Office recently stated that a four-week shutdown would cost the US economy $7 billion; a six-week shutdown would cost $11 billion; and an eight-week shutdown would cost as much as $14 billion. The Federal Reserve's policy shift is another straw that broke the camel's back for the market. Federal Reserve Chairman Powell's hawkish comments last week downplayed market expectations for a December rate cut and reinforced the narrative that interest rates will remain high for a longer period. This shift has pushed the dollar stronger, putting direct pressure on non-interest-bearing assets such as Bitcoin. BitMEX founder Arthur Hayes stated that the US Treasury is borrowing money but not spending it. The Treasury's general account is about $150 billion over its $850 billion target, and this additional liquidity will not be released into the market until the government reopens. This liquidity withdrawal is one of the reasons for the current weakness in the crypto market. Market volatility is expected, especially before the US government shutdown ends. Many people mistakenly believe this period of market weakness and stagnation is a top and sell their positions, which is a mistake because the workings of the dollar money market do not lie. Bessant not only needs to issue $2 trillion annually to fund the government, but also trillions of dollars to roll over maturing debt, and implicit quantitative easing through SRF will soon begin. (See Jinse Finance's previous article, "Arthur Hayes: The US Government Shutdown is One of the Reasons for the Current Weakness in the Crypto Market; Please Wait Patiently for the Hidden QE") V. Frequent Protocol Vulnerability Attacks Exacerbate Market Panic Following the Balancer hack on November 3rd, which resulted in losses exceeding $100 million, other projects have suffered vulnerability attacks. CertiK monitoring revealed that Moonwell's lending contract was attacked by multiple transactions. The attackers exploited a faulty oracle's returned wrst price (approximately $5.8 million) to repeatedly borrow over 20 wstETH by flash-borrowing only about 0.02 wrstETH and depositing it, profiting 295 ETH (approximately $1 million). Furthermore, on November 4th, according to PeckShield monitoring, the staked stablecoin Staked Stream USD (token symbol $XUSD) had de-pegged, falling by approximately 23%. Stream Finance subsequently stated that an external fund manager disclosed a loss of approximately $93 million in Stream funds under their supervision. Stream has hired Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP to lead a full investigation. Stream is withdrawing all liquid assets and has announced a suspension of all deposit and withdrawal operations. The cryptocurrency market was already vulnerable due to the large-scale liquidation events in October, and a series of protocol vulnerability attacks and asset de-pegging events have further exacerbated this vulnerability. VI. Has the Bull Market Ended? Market Analysis and Interpretation Overview After a series of declines, has the cryptocurrency bull market ended? Will the market continue to fall or rebound? Let's take a look at the main analysis. 1. Bitwise Chief Investment Officer Matt Hougan stated that while retail investors are in a state of "greatest despair," he believes this actually means the market bottom may be approaching, rather than being a long way off. With support from Wall Street institutional investors and financial advisors for Bitcoin, and the growth of cryptocurrency ETFs, he even boldly stated that it's not impossible for Bitcoin to reach a new all-time high before the end of the year amidst the current sharp sell-off. Hougan believes that more crypto trading is gradually shifting to an institutionally dominated market. 2. Bloomberg ETF analyst Eric Balchunas wrote that the growth of Bitcoin ETFs will go through a process of two steps forward and one step back, and is currently in the step-back phase. This pattern can be seen in IBIT's fund flows. In my opinion, this is part of the development process. Only children expect prices to rise every day.

3. DeFiance Capital founder @Arthur_0x tweeted, "I entered the cryptocurrency space in 2017, and the current situation is comparable to late 2018 to 2019. It's the most challenging market environment ever faced by cryptocurrency market participants. Survival is key now."

4. Cryptocurrency market maker Wintermute wrote that despite a supportive macroeconomic environment, including interest rate cuts, the end of quantitative tightening, and the stock market nearing its peak, cryptocurrencies continue to lag behind other asset classes. Wintermute pointed out that global liquidity is expanding, but funds are not flowing into the cryptocurrency market. Of the three major drivers of fund inflows that propelled the first half of the year, only stablecoin supply has continued to grow, while ETF inflows have stagnated since the summer, with BTC ETF assets under management hovering around $150 billion, and digital asset trading (DAT) activity has dried up.

Wintermute believes the four-year cycle concept is no longer applicable to mature markets, and liquidity is currently the key driver of performance. They will closely monitor ETF inflows and DAT activity, as these will be important signals of liquidity returning to the cryptocurrency market. CryptoQuant data shows that the stablecoin supply ratio (SSR) has fallen back to the 13-14 range. Historically, this level has repeatedly marked inflection points in market liquidity—when stablecoin balances increase relatively, it means that off-exchange "purchasing power" is accumulating. Currently, Bitcoin is trading around $100,000, and the low SSR suggests that stablecoin liquidity may be quietly rebuilding. Analysts believe this could pave the way for a retaliatory rebound or the final bull run of this cycle. 6. Elon Gu, senior analyst at Ultima Markets, points out that from a technical perspective, for Bitcoin to reverse its upward trend, it first needs to reclaim the 21-day exponential moving average (EMA) and the area of ​​high trading volume around $111,000. Above this, $116,000 will be the next key resistance level. 7. Analyst @ali_charts, based on glassnode's Bitcoin UTXO realized price distribution chart, notes that below $104,800, the number of UTXOs (unspent transaction outputs) supporting the price is relatively small. 8. Strategy founder Michael Saylor stated that Bitcoin will "forever" rise at a rate of 20% per year, which he calls a global reserve capital network. 9. Market analyst Damian Chmiel pointed out that if the price of Bitcoin continues to fall below $100,000, it could trigger a more dramatic sell-off, with the next target being the low of nearly $74,000 in April, implying a potential downside of about 30% from current levels. 10. Crypto.com founder and CEO Kris Marszalek stated that any way to bring more money into the industry is good, but cautioned that "99% of these companies will go to zero. If you want to invest, you have to be very selective, choosing companies with the right ecosystem and a long-term vision, not just those that are just for quick profits." Kris Marszalek advises investors to be cautious, comparing investing in digital asset reserve tokens to investing in the angel round of a startup.