This follows challenging months for the cryptocurrency. On November 17, it briefly fell below $90,000 for the first time in seven months, before reaching around $91,800 on November 20.
Global stock markets rose on November 20, after strong results from Nvidia eased fears of a market crash linked to the alleged overvaluation of artificial intelligence companies.
Bitcoin, the world’s most established cryptocurrency, also saw a slight increase — up 0.73% by early afternoon in Europe.
This follows challenging months for the cryptocurrency. On November 17, it briefly fell below $90,000 for the first time in seven months, before reaching around $91,800 on November 20.
A turning point for cryptocurrencies can be traced back to October 10, when a crash wiped out more than $1 trillion in market value across all tokens. Over $19 billion in leveraged positions were liquidated, especially after US President Donald Trump threatened new tariffs on China.
“There were several catalysts for the recent price drop, but it seems the main ones were long-term sales by ‘OGs,’ the uncertain economic environment, and the massive ‘de-leverage’ event on October 10,” said Nik Pakrin, CEO of Coin Bureau, to Euronews.
“OGs refers to older Bitcoin holders with huge amounts. They have been selling for weeks, leading to an avalanche of supply on the market,” Pakrin added.
Analysts note that the US economy is currently in a period of deep uncertainty, partly due to a government shutdown that delayed the release of key economic data, which in turn contributes to the decline in cryptocurrencies.
The outcome of the Federal Reserve’s next interest rate decision, expected in December, remains uncertain, with investors lowering expectations for a cut. Minutes from the Fed’s October meeting showed deep division within the committee regarding a potential rate reduction.
“Bitcoin is increasingly driven by macroeconomic factors,” Pakrin commented.
Analysts warn that as cryptocurrencies and traditional financial markets become more interconnected, counterparty risk will make both crypto assets and stock markets more volatile.
Bitcoin reached its price peak in October thanks to growing institutional adoption, expectations of Fed rate cuts, and support from the Trump administration.
For Carol Alexander, a cryptocurrency expert and finance professor at the University of Sussex, Bitcoin’s volatility is primarily due to aggressive trading strategies rather than macroeconomic conditions alone.
“Bitcoin’s price is largely determined by professional traders on offshore, unregulated exchanges. These are not hobby investors; they are large hedge funds and specialized trading firms,” Alexander said.
“On these offshore crypto exchanges, professional traders can employ aggressive order-book strategies — sometimes called spoofing or laddering… Their business model relies on generating sharp volatility. They don’t care whether the price rises or falls; what matters is that it moves quickly,” she added.
In other words, these traders profit from price fluctuations by buying during dips and selling during recoveries, without focusing on long-term investments.
Losses often occur for non-professional traders who take on massive leverage — borrowing money to increase their investment size. When the market turns against them, they are forced to sell and lose everything.
“When too many of these non-professional traders are liquidated, liquidity dries up and the professionals pull back,” Alexander explained. “Then the price often rebounds sharply, encouraging new participants to enter. The whole system behaves like a football match in a stadium without a referee.”
Pakrin also predicts a rise in cryptocurrencies, expecting that they will not fall significantly below current levels.
“I still think the future is bright, despite price fluctuations. Crypto has gone through many cycles and always comes out stronger. We also see mass adoption and institutionalization of the industry, which means more people can use the technology in their daily lives.” | BGNES
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