On the evening of November 26, Beijing time, the cryptocurrency market experienced a significant downturn. Bitcoin briefly fell below $92,000 per coin, marking a decline of over 6% within 24 hours. Other major cryptocurrencies, including Solana, XRP, Dogecoin, and Cardano, saw even steeper drops exceeding 10%. According to Coinglass data, the number of liquidations in the cryptocurrency market surpassed 220,000 during this period, with nearly $700 million in liquidation volume.
Analysts point to two primary factors behind this sudden sell-off. First, profit-taking by investors who had benefited from recent rallies played a role. Second, former U.S. President Donald Trump’s renewed threats of imposing tariffs introduced renewed uncertainty into global markets, triggering a flight to safety that also impacted cryptocurrency valuations.
Understanding the Scale of the Liquidation
The cryptocurrency market has been volatile throughout the week. Bitcoin, which started the week near $98,900, fell to a low of around $91,500. As of 7:40 PM on Tuesday, Bitcoin was trading at approximately $91,600, down 6.69% for the day. Ethereum also declined nearly 5% to $3,302. Among other notable assets, Solana dropped over 10%, while XRP and Dogecoin each fell more than 13%. Cardano led the losses with a decline of nearly 16%. Overall, the total market capitalization of cryptocurrencies shed over $180 billion.
Data from Coinglass detailed the human and financial impact of this movement: close to 226,600 traders were liquidated, resulting in total liquidations worth $693 million. Of this, long position liquidations accounted for $587 million, while short positions made up the remaining $106 million.
Key Factors Behind the Market Movement
On November 25, former President Trump announced proposals to impose a 25% tariff on all products entering the U.S. from Mexico and Canada. He also suggested a 10% tariff on all goods imported from China.
This protectionist rhetoric, even before any official policy enactment, created ripples across global financial markets. Cryptocurrencies, which often behave as risk-on assets, faced selling pressure as investors sought safer havens amid the uncertainty.
Michael McCarthy, Market Strategist and Chief Compliance Officer at Moomoo Australia, noted, "The price action in Bitcoin indicates bubble-like behavior, which doesn’t align with any traditional valuation methods."
Despite the recent correction, the broader context remains noteworthy. Data from CoinShares showed that U.S.-based spot Bitcoin ETFs recorded weekly inflows of $3.38 billion for the period November 18–22, a new record and more than double the figure from the previous week. Bitcoin had surged to a new all-time high near $99,500 on Friday before quickly retreating as it approached the symbolic $100,000 level.
Coinglass reported that Sunday’s price adjustment led to over $500 million in liquidations from crypto futures. By Tuesday, during Asian trading hours, an additional $144 million in Bitcoin liquidations signaled that volatility was likely to continue.
Will the Downturn Continue?
Despite the recent pullback, many analysts believe Bitcoin’s bull run is not over. Some technical analysts pointed to overbought signals that suggested a correction was due. Several market observers anticipate a possible decline toward the $80,000 level before another bullish leg higher. However, breaking the $100,000 barrier will likely require a new catalyst.
Adrian Przelozny, CEO of cryptocurrency exchange Independent Reserve, commented, “People have been looking for an excuse to take profits. We remain very confident that the current bullish sentiment will continue into 2025.”
Billionaire investor and well-known crypto proponent Michael Novogratz recently stated that Bitcoin is destined to cross $100,000 but could then correct by as much as 20%. The founder and CEO of Galaxy Digital advised investors to prepare for a short-term pullback. He acknowledged that reaching $100,000 is “inevitable” but warned that the market’s high leverage could lead to a sharp correction, possibly pushing Bitcoin toward $80,000—a level he considers a potential bottom.
Novogratz also expressed concern about highly leveraged stocks and ETFs tied to crypto, such as MicroStrategy. He cautioned, “There will definitely be some significant adjustments, especially in stocks that are more highly leveraged than the underlying asset itself.”
Still, Novogratz remains optimistic about Bitcoin’s long-term prospects. He believes that the election of Donald Trump represents a “paradigm shift” for crypto regulation, noting that many in Trump’s prospective cabinet are Bitcoin holders and digital asset advocates. This political support, he argues, will foster innovation and positive regulatory developments.
Josh Gilbert, Market Analyst at eToro Australia, added, “There’s no doubt that hitting $100,000 is a major psychological level for many, and we are likely to see some profit-taking along the way.”
Trump, once a skeptic of digital assets, has recently repositioned himself as a supporter. He has promised to make the U.S. the “crypto capital of the world” by encouraging supportive regulations and even proposing a national Bitcoin reserve. How quickly these changes can be implemented—and whether they are feasible—remains uncertain.
Jaret Seiberg, an analyst at TD Cowen, noted in a report that Trump would “gain immediate control over the SEC after the January 20 inauguration,” which he views as a positive sign for reduced enforcement and increased compliance within the crypto industry.
Recent flows into U.S. spot Bitcoin ETFs—totaling over $7 billion since the election—highlight growing institutional and retail acceptance. These ETFs now hold total assets of $105 billion.
Tony Sycamore, Market Analyst at IG Australia Pty, interpreted the recent pullback as a healthy correction rather than a reversal. “This is a much-needed correction to work off overbought conditions,” he said. “It’s also a reminder that markets, even crypto markets, don’t move in a straight line indefinitely.”
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Frequently Asked Questions
What caused the recent crash in the cryptocurrency market?
The decline was driven by a combination of profit-taking after strong rallies and broader market uncertainty stemming from proposed tariff policies. These factors triggered a risk-off sentiment among investors.
How many traders were affected by liquidations?
Over 220,000 traders faced liquidations during the 24-hour period, with total liquidation volumes nearing $700 million. The majority were long positions that got caught in the sudden downturn.
Is Bitcoin expected to recover from this drop?
Many analysts believe this is a correction within a larger bull trend. Predictions suggest Bitcoin could consolidate near $80,000 before attempting to break the $100,000 barrier, depending on market catalysts.
What role did political events play in this market move?
Announcements regarding potential tariffs introduced macroeconomic uncertainty, leading investors to reduce exposure to risk assets, including cryptocurrencies.
Are leveraged cryptocurrency investments risky?
Yes, highly leveraged positions can amplify gains but also lead to significant losses, especially during periods of high volatility. It’s important to manage risk carefully.
How can investors stay updated on cryptocurrency market trends?
Following reliable market analysis platforms and using risk management tools can help investors make informed decisions. 👉 Get advanced market insights