Bitcoin fell below 104,000, and 350,000 people liquidated their positions!

Nakamoto 2025-11-5 12:54 38865人围观 BTC

Code loopholes, institutional withdrawals, and macro-negatives, the cryptocurrency market is undergoing a severe test under the triple blow. The Bitcoin market once again ushered in "Bloody Monday." In the past 24 hours, the price of Bitcoin fell below th

Code vulnerabilities, institutional divestment, macro-negative,

The cryptocurrency market is undergoing a severe test under the triple blow.

The Bitcoin market once again ushered in "Bloody Monday." In the past 24 hours, the price of Bitcoin fell below the US$104,000 mark, with a single-day drop of more than 3%, and mainstream currencies such as Ethereum, BNB, and Dogecoin fell by as much as 4-5%.

This plunge caused nearly 350,000 investors to liquidate their positions, with a total liquidation amount of approximately US$1.4 billion. The vast majority of them were long liquidations, accounting for more than 90% of the total liquidation amount on the entire network, indicating that the market's generally bullish expectations were completely shattered.

What's even more worrying is that this plunge is not an isolated incident. The veteran DeFi protocol Balancer suffered a hacker attack, causing losses of up to $116 million ； At the same time, institutional funds are withdrawing from the Bitcoin ETF market on a large scale, coupled with the hawkish stance of the Federal Reserve, creating this perfect storm.

01 Market tragedy: the triple blow behind the plunge

On November 4, Beijing time, the cryptocurrency market as a whole showed a sharp correction. As the core asset of the market, the price of Bitcoin fell below the key mark of US$104,200, reaching a minimum of around US$105,300, with a single-day drop of more than 4%.

With the exception of Bitcoin, other major cryptocurrencies have suffered more significant declines. Ethereum price plunged 9%, falling below the key support level of $3,600, down 25% from the August high ； Mainstream altcoins such as Solana, BNB, and Dogecoin fell between 8% and 11%.

From a broader market perspective, the MarketVector index, which tracks the performance of the bottom 50 of the top 100 digital assets, has fallen for the third consecutive trading day, with a drop of as much as 8.8%. The index has fallen by approximately 60% this year, fully reflecting the overall weakness of the current crypto market.

Behind this plunge is the superimposed effect of three negative factors.

First, DeFi security loopholes have shaken the foundation of the market. Balancer, a decentralized financial protocol based on Ethereum, has exposed security vulnerabilities. Attackers exploited smart contract interaction vulnerabilities to steal a large amount of assets. This attack resulted in the draining of approximately US$70 million in assets from the Ethereum mainnet, with the total loss ranging from US$110 million to US$116 million.

Even more worryingly, security analysts discovered that the attack may have used AI-assisted code generation. It is extremely rare for hackers to retain debugging logs in official code, and the meaningless content such as "Donewithamts1" that appeared in this attack is more likely to be copied from the template generated by LLM.

Second, demand from institutional investors has slowed significantly. The latest report from digital asset management company CoinShares shows that U.S. Bitcoin exchange-traded funds (ETFs) became the main area of institutional fund outflows last week, with redemptions reaching US$946 million in a single week.

Charles Edwards, founder of Capriole Investments, pointed out that demand for Bitcoin from large institutions has shown signs of slowing down and has fallen below the rate of new Bitcoin coin production for the first time in seven months. The change means a key driver of the market's previous gains is weakening.

Third, the macro environment is unfavorable for risk assets. Federal Reserve Chairman Powell made it clear that another interest rate cut in December is "not an established fact." This hawkish stance has made the market more cautious about the direction of subsequent monetary policy. The high interest rate environment drives up the opportunity cost of holding non-yielding assets such as Bitcoin, while suppressing short-term speculation momentum.

02 Where is the bottom?

Faced with the continued decline of the market, the question that investors are most concerned about is: Where is the bottom of Bitcoin?

From a technical analysis perspective, $106,600 is Bitcoin’s key support range. If this support range falls, the price of Bitcoin may further drop to the range of $98,000 to $100,000, and this range will most likely form a new buying area.

Currently, the market is divided on where Bitcoin’s bottom lies. Glassnode pointed out that the market is struggling near the short-term position cost price (about $113,000). If it is unable to recover this area, it may drop further to around $88,000 - which is the cost line for active investors.

However, there are some positive signs that the market may be nearing a stage bottom.

The panic index has been below 40 since February this year, and historical data shows that when the panic index is lower, it often means that the currency price may be in a periodic bottom range. Markets often breed opportunities amid panic.

The seven-day average funding rate for Bitcoin perpetual contracts has dropped 85% from its peak in December last year. A sharp drop in funding rates usually means that market sentiment has returned to rationality from extreme optimism, which is often one of the signals that the market has bottomed out.

On-chain data also provides some positive support for the market. Although long-term Bitcoin holders sold nearly 400,000 Bitcoins worth more than $40 billion in the past month, Bitcoin spot ETFs still experienced net inflows of approximately $2.5 billion during the same period.

This balance of capital inflows and outflows is similar to the market state after many "open interest cleansings" in history. After similar stages in the past, Bitcoin has repeatedly experienced strong rebounds of more than 75%.

03 Historical patterns and future trends: Will there be a turnaround in November?

Judging from historical seasonal patterns, Bitcoin's average increase in November exceeded 40%. This historical pattern may provide an important reference for the current market to stop falling and stabilize. Over the past decade, the average monthly gain in November has been more than 19%, with positive gains in eight of the past ten years.

The most notable examples include two rallies in 2020 and 2021 of 42.9% and 39.9% respectively, both of which followed consolidation in October. The current technical formation is consistent with a similar compression phase that preceded the previous November rally.

This year, however, the situation is more complicated. Market volatility in October caused Bitcoin to post negative monthly growth for the first time since 2018, with a drop of 5%. The reversal surprised traders, who typically consider October to be Bitcoin’s strongest month in history.

Observing from the market structure, Bitcoin’s dominance rate continues to rise and is currently 60.67%. This phenomenon shows that funds are concentrating from altcoins to Bitcoin, and Bitcoin’s market hedging properties are further highlighted. When market uncertainty is high, investors are more likely to allocate funds to Bitcoin, which is relatively stable.

Jordi Alexander, CEO of Selini Capital, a cryptocurrency trading and market-making company, pointed out that the current crypto market is in a "hangover stage" after the liquidation shock in October. On the one hand, investors need time to rebuild the capital base damaged in the October shock. ； On the other hand, market confidence has not yet fully recovered.

If Bitcoin can find support in the range of US$97,000 to US$100,000, the market is expected to usher in a technical rebound as the short forces are released and long funds gradually enter the market.

Faced with the current highly uncertain market environment, how should investors respond?

Maintaining a calm and rational investment mentality is the key. Periods of market panic often lead to irrational decisions, and historical data shows that the cryptocurrency market has obvious cyclical characteristics. Staying rational when the market is panic and staying cautious when the market is crazy are the keys to long-term success.

Focus on on-chain data rather than market noise. Some key indicators such as panic index, funding rate, stablecoin market value, etc. can provide a more objective judgment of market sentiment. Currently, despite the sluggish market sentiment, the market value of stablecoins has risen instead of falling in the past month. The market values of USDT and USDC have both increased, which may indicate that funds are preparing to enter the market.

Be wary of high leverage risks. The liquidation amount of up to US$1.4 billion in the past 24 hours fully demonstrates that using high leverage in the highly volatile cryptocurrency market is extremely risky. Deleveraging is one of the main features of the current market, and reducing the leverage ratio can help avoid the risk of liquidation.

For long-term investors, the current market may provide certain layout opportunities. Every time the price bottom was formed in the history of Bitcoin, the consolidation was completed between the 200-day moving average and the 365-day moving average, and the current price is still within this range, which means that the "higher peak and higher trough" upward trend formed since 2022 has not yet ended.

Changes in Bitcoin mining difficulty also provide some clues. Despite the recent market decline, Bitcoin mining difficulty hit an all-time high of 114.7T. New highs in difficulty usually indicate that miners are still optimistic about the long-term value of Bitcoin, otherwise they will not continue to invest in computing power. This may have a certain positive impact on market sentiment.

In the long term, the integration of Bitcoin with the traditional financial system continues. The recent "Web3 Freedom and Order Forum" held in Hong Kong shows that the mainstream financial world is actively exploring the compliance development path of digital currency. This institutional construction is critical to the long-term healthy development of cryptocurrencies.

The market is always moving forward in fluctuations, and every deep correction may be the starting point for a new round of growth. For investors who can withstand such high volatility, understanding market cycles and maintaining strategic focus are more important than blindly chasing ups and downs.