Bitcoin has erased its summer rally, dropping over 20% from last month’s record and falling below $100,000 for the first time since June. A steep wave of October liquidations drained bullish positions, leaving traders sidelined and futures open interest depressed. Ether and altcoins also tumbled sharply, with many tokens down over 50% this year, as Bitcoin underperforms equities and loses its hedge appeal.
Bitcoin has wiped out its summer rally, giving back gains made during Wall Street’s euphoric embrace and a surge in institutional buying.
The original cryptocurrency fell as much as 7.4% to $96,794 on Tuesday in New York, the first time below $100,000 since June. That’s down more than 20% from a record high reached a month ago, a plunge consistent with a bear market in equities. Ether slipped as much as 15% and several so-called altcoins posted similar declines, bringing losses for many of the less easily traded and liquid tokens to more than 50% this year.
The turning point came in October, when a brutal wave of liquidations wiped out more billions in bullish positions. Since then, traders have stayed on the sidelines. Open interest in Bitcoin futures remains far below pre-crash levels, and even with funding costs turning favorable, few are willing to re-enter. The result: Bitcoin is up less than 10% this year, lagging equities and once again falling short as a portfolio hedge.
“Bitcoin’s decline to the June lows reflects a market structure still grappling with the psychological overhang from October’s massive liquidation event, which has fundamentally altered how participants engage with the prevailing downtrend,” said Chris Newhouse, director of research at Ergonia, a firm specializing in decentralized finance.
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Call it a low-conviction selloff. The total liquidation figure — both long and short — for Tuesday stood at a modest $1 billion, according to data compiled earlier by Coinglass. That’s a significant decline from the record of around $19 billion wiped out on Oct. 10.
In the meantime, options traders have built substantial hedges against further downside, with put contracts expiring in late November with the strike price of $80,000 seeing the most demand, according to Coinbase-owned crypto exchange Deribit.
Bitcoin’s slide mirrors the reversal in high-flying tech stocks this week, with AI names like Palantir and Nvidia tumbling amid fresh doubts about stretched valuations. Bitcoin, often seen as a proxy for speculative momentum, is once again falling in step with equity sentiment.
The original cryptocurrency recovered some ground during early trading in Asia on Wednesday, gaining as much as 1.6%. It was trading at $101,130 as of 8:27 a.m. in Singapore, while other tokens also trimmed losses.
Cryptocurrencies face several other headwinds, including outflows from exchange-traded funds and concerns about potential selling by digital-asset treasury firms.
Both spot Bitcoin and Ether ETFs have posted outflows over the past month, signaling cooling investor demand after a strong run earlier this year. And while it’s still early in November, the trend so far is shaping up to be net negative, hinting at a pause in the sector’s momentum.
“While the longer-term directional bias remains clearly bearish, the severity of October’s liquidations has prevented traders from maintaining sustained short positions with conviction, resulting in a market dominated by tactical, short-term momentum trades rather than committed directional exposure,” said Newhouse.
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