Bitcoin falls below $90,000, cryptocurrency market capitalization evaporates by over one trillion dollars.

Article Introduction

The luster of digital gold has dimmed, with Bitcoin falling below $90,000 for the first time in seven months, undergoing a dual test of macroeconomic interest rate policies and internal market structure.

On November 18, the price of Bitcoin fell below the key psychological level of $90,000, hitting a low of $89,288.7, marking the first time this level has been breached since April of this year.

This drop means Bitcoin has fallen nearly 30% from its all-time high of $126,199 in early October, wiping out all of its gains this year. This decline is not merely a simple price correction; it has shaken the very foundations of the entire cryptocurrency market. According to market data, the global cryptocurrency market capitalization has shrunk by 25% from its peak of $4.379 trillion in early October to approximately $3.282 trillion, a loss of over $1 trillion in value. Accompanying the price decline has been massive liquidations. Coinglass data shows that in the past 24 hours, over 175,000 investors in the cryptocurrency market have experienced liquidations, with a total liquidation amount of $935 million. Of these, long positions were liquidated for $650 million, far exceeding the $280 million in short positions, indicating that the market's bullish momentum is nearing collapse. This round of Bitcoin decline is the result of a combination of macroeconomic pressures, policy uncertainty, and internal market structural problems. At the macro level, the sharp shift in the Federal Reserve's monetary policy outlook is the main driving force. As the market's expectation of a Fed rate cut in December fell below 50%, investors began systematically withdrawing from high-risk asset positions. The weakening expectation of interest rate cuts directly altered expectations of funding costs. The continued decline in the crypto market after falling below $100,000 is essentially an inevitable result of the diminishing liquidity premium. The market's internal structure also presents problems. After reaching new highs, Bitcoin lacked sustained new capital inflows, and highly leveraged long positions were concentratedly liquidated during the consolidation, exacerbating short-term selling pressure. Simultaneously, institutional funds have seen a recent decline in net inflows, with some small and medium-sized miners cashing out early to maintain cash flow. Geopolitical factors also played a role; starting October 11th, global risk assets generally came under pressure due to US President Trump's statements on tariffs. Subsequently, the record-breaking US government shutdown, coupled with escalating uncertainty surrounding fiscal and monetary policy prospects, further exacerbated market concerns about the liquidity environment. Market attention to Bitcoin's four-year cycle is significantly increasing. The current time window is approximately 400 to 600 days after the last halving, a period historically coinciding with Bitcoin's cyclical price peaks. This cyclical behavior stems from Bitcoin's inherent characteristics: halving events reduce the supply of new blockchain data, while demand gradually increases over time, traditionally leading to a price peak approximately 12-18 months after the halving. From a market psychology perspective, after Bitcoin reached a new all-time high, long-term holders tended to take profits, releasing a large supply into the market. The price decline is likely the result of a combination of profit-taking, shrinking liquidity, and macroeconomic pressures. It's worth noting that this round of selling coincided with a global correction in risk assets. The recent correction in the US technology sector and cautious market sentiment further amplified Bitcoin's short-term volatility. This indicates that cryptocurrencies have become more deeply integrated into the traditional financial system, and are also more susceptible to its volatility. Market opinions on Bitcoin's future trajectory are clearly divided. BitMEX co-founder Arthur Hayes warned that Bitcoin's drop from $125,000 to the $90,000 range while US stocks remain at historical highs indicates a credit event is brewing. Hayes further pointed out that the dollar liquidity index has weakened significantly since July, and if the market deteriorates further, the Federal Reserve, the Treasury, or other institutions may be forced to accelerate money printing to stabilize the market. In this scenario, Bitcoin could potentially fall back to the $80,000 to $85,000 range. Pessimistic views suggest that a sustained drop below $100,000 could trigger a more dramatic sell-off. Market analyst Damian Chmiel stated that the next target would be the low of nearly $74,000 in April, implying a potential downside of approximately 30% from current levels. Despite recent market volatility, some Wall Street institutions remain bullish. Fundstrat's Tom Lee predicts that Bitcoin could surge to $150,000 to $200,000 by the end of 2025. He points out that just weeks ago, the market experienced a historic liquidation larger than the FTX exchange crash, but this has not shaken his long-term confidence. On the morning of November 19th, the price of Bitcoin had rebounded to the $92,000 range.