Capitulation Point: BTC erases all 2025 gains

10 days ago

The cryptocurrency market crisis of November 17, 2025, was a multidimensional collapse, triggered by a sharp change in expectations regarding the Federal Reserve's restrictive monetary policy, exacerbated by the formation of bearish technical signals and the cascading liquidation of leveraged positions.

Analytical Report: In-Depth Analysis of the Cryptocurrency Market Crisis of November 17, 2025

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Name: The Drowned Market

Date: 17 November 2025

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1. Introduction: Genesis and Context of the Crisis

The continuation of the cryptocurrency market crisis on November 17, 2025, was a multidimensional collapse, triggered by a sharp change in expectations regarding the Federal Reserve's restrictive monetary policy and reinforced by the formation of bearish technical signals and the cascading liquidation of leveraged positions. The crypto market recently experienced a rapid and painful correction, which is still ongoing as of November 17, 2025, following a period of dynamic growth. The report aims to conduct an in-depth, multifactor analysis of the causes and consequences of this collapse.

Within just a few weeks, market sentiment drastically changed, moving from the optimism that characterized early October to a state analysts describe as "extreme fear". The main catalyst for this transformation was the shift in expectations regarding the monetary policy of the US Federal Reserve, which triggered a cascade of negative events in the global market.

2. Market Overview: Scale and Scope of the Collapse

To fully understand the depth of the crisis, an assessment of specific market indicators is necessary. This section quantifies the losses incurred by the most important cryptocurrencies, illustrates the general condition of the market on November 17, 2025, and presents the prevailing investor sentiment.

2.1. Price Dynamics of Key Digital Assets

The sharp sell-off affected the entire sector, although its scale was varied.

Bitcoin (BTC): The largest cryptocurrency’s quotes oscillated between $91,900 and $95,320, reaching the lowest level since early May. Bitcoin’s value fell by 27% relative to the historical peak of October 6 ($126,272.76) and by 13% on a weekly scale. As a result, this erased all gains made in 2025.
Ethereum (ETH): The second largest cryptocurrency tested the key psychological support level at $3,000, eventually stabilizing around $3,199.35 (a daily increase of 0.66%). Ethereum’s results were significantly worse than Bitcoin’s in the broader perspective – a drop of about 40% from the annual peak in August ($4,955.90) testified to its lower resistance to correction.
Major Altcoins: Other leading digital assets recorded mixed results. Despite the dominant downward trend, some major altcoins recorded slight rebounds on November 17, indicating mixed short-term sentiment. Examples included: Solana (SOL) with a price of $142.02 (+1.40%), Ripple (XRP) with $2.2622 (+0.95%) and Dogecoin (DOGE) with $0.16228 (+0.66%). Cardano (ADA) recorded a drop of -0.24%.

2.2. General Market Condition and Investor Sentiment

The overall cryptocurrency market capitalization stabilized at $3.25 trillion, recording a minimal drop of 0.01% over 24 hours. However, sentiment indicators painted a much more pessimistic picture.

The key indicator, the Crypto Fear and Greed Index (Indeks Strachu i Chciwości), fell to 17/100, which is unequivocally interpreted as "extreme fear". This is the lowest value recorded since April, indicating panic and lack of confidence among market participants.

3. Analysis of Causal Factors: Identifying the Catalysts for Declines

Understanding the causes of the November 17 crisis requires a comprehensive analysis on three fundamental levels: macroeconomic, technical, and structural. Identifying these factors is strategically important for assessing the current situation and managing future risk.

3.1. Change in Macroeconomic Expectations: The Role of the Federal Reserve

The main catalyst for the mass sell-off was the sudden change in investor expectations regarding the future monetary policy of the Federal Reserve (Fed).

The probability of a December interest rate cut, which was close to 70% just a few days earlier, dropped to approximately 50%. These data were confirmed by quotes on the Polymarket platform and the CME FedWatch Tool.
The direct cause of this change was better-than-forecast economic data from the US, particularly the surprisingly high reading of the New York Federal Reserve Empire State Manufacturing Survey index, which rose to 18.7 points.

Risk assets markets, including cryptocurrencies, discounted this information as a signal that the Fed might maintain a restrictive monetary policy longer than originally assumed, reducing the attractiveness of high-risk investments.

3.2. Technical Warning Signals and Confirmation of the Downtrend

Parallel to macroeconomic factors, strong, bearish technical signals materialized on the charts of key cryptocurrencies, further reinforcing selling pressure.

On the Bitcoin chart, the so-called "death cross" formed, which is the crossing of the 50-day moving average below the 200-day average. This is a classic technical signal foreshadowing long-term downward pressure.
Ethereum was also approaching the formation of a "death cross," and analysts warned of a potential drop to the 1,370–1,500 zone.
The downtrend was further confirmed by the formation of lower highs and lower lows on charts across various time intervals.
The Relative Strength Index (RSI) at 43.52/100 signaled neutral conditions, not market overselling, suggesting that there was still room for further declines.

3.3. Cascading Liquidation and Capital Flows

Negative macroeconomic and technical signals caused a domino effect, leading to the massive liquidation of leveraged positions and a significant capital outflow.

The market experienced a liquidation event on Bitcoin positions worth $19 billion, triggering a cascading sell-off across the entire digital asset market.
Data on institutional capital flows indicate a clear slowdown in demand. BTC holdings in US ETF funds dropped from 441,000 BTC (October 10) to 271,000 BTC.
There was also a noticeable lack of interest in purchasing from retail investors, who refrained from "buying the dip".
On-chain analyses conducted by CryptoQuant showed that sellers were realizing profits, suggesting that the full market capitulation driven by margin calls had not yet occurred.

4. Market Reactions and Future Prospects

The effects of the November 17 crisis extended far beyond the spot prices of key cryptocurrencies, also encompassing derivatives markets and shares of publicly traded companies associated with the sector.

4.1. Impact on Derivatives Markets and Stock Shares

Sentiment in the derivatives markets unequivocally pointed to the dominance of the supply side and expectations of further declines.

Futures Market (futures): A significant drop in open interest (OI) was recorded, indicating capital outflow. For tokens such as Zcash (ZEC), the OI drop exceeded 6%, and for Litecoin (LTC) it was over 10%.
Options Market: Data from the Deribit exchange showed a strong preference for put options, reflecting investors' efforts to hedge against further price declines.

Declines also spread to stock exchanges:

Shares of Coinbase (COIN), Circle (CRCL), Gemini (GEMI), and Galaxy (GLXY) lost about 7% in value.
Shares of Strategy (MSTR), the largest corporate Bitcoin holder, fell by 4%, reaching the lowest level since October 2024.
Companies related to the Ethereum ecosystem, such as BitMine (BMNR) and ETHZilla, recorded drops of 8% and 14%, respectively.

4.2. Analyst Opinions and Potential Rebound Scenarios

Despite the pervasive pessimism, some market analysts maintained a more optimistic stance.

Analysts at Bitfinex pointed to the stabilizing rate of realized losses, which may suggest that the market is nearing a local price bottom.
Tom Lee of Fundstrat maintained his long-term bullish thesis, predicting that Bitcoin would reach new historical peaks before the end of 2025, and defending his "supercycle" perspective for Ethereum.
Historically, periods of "extreme fear" often represented attractive buying opportunities for long-term investors.
A positive exception in the market was the company Hive Digital (HIVE), whose shares rose by 10% after announcing a partnership with Dell Technologies in the area of AI cloud, illustrating the resilience of the segment associated with artificial intelligence.

5. Long-Term Factors and Regulatory Environment

A full assessment of the market condition requires considering fundamental factors that will shape its future in the long term.

The plans of the Japanese Financial Services Agency (FSA) regarding the reclassification of cryptocurrencies as financial products represent an important step towards integrating digital assets with the traditional financial system. Such a regulatory change may increase the availability of these assets to a wider range of investors.
Another fundamental milestone is the fact that 95% of the total Bitcoin supply has already been mined. Reaching this threshold strengthens the narrative of its digital scarcity and deflationary nature, which is a key argument for its long-term potential for value growth.

6. Summary and Conclusions

The cryptocurrency market crisis of November 17, 2025, was a multidimensional event, fueled by a confluence of unfavorable macroeconomic, technical, and structural factors. The key cause of the collapse proved to be the re-evaluation of the future monetary policy of the Federal Reserve, which weakened risk appetite.

Negative sentiment was amplified by the market's technical weakness, confirmed by the "death cross" formation, and deepened by the cascade of leveraged position liquidations and a clear outflow of institutional capital from ETFs. Bitcoin erased all gains from 2025, and altcoins suffered even greater losses on a multi-week basis. The negative wave spread to the shares of companies in the cryptocurrency sector.

The conclusions drawn from the analysis are complex. On one hand, the market faces pressure resulting from restrictive monetary policy and technical weakness. On the other hand, some analysts maintain long-term optimistic forecasts, pointing to fundamental factors, such as excessive government spending. History shows that periods of extreme fear often provided opportunities for disciplined long-term investors.

FAQ

What was the main catalyst for the sharp sell-off in the cryptocurrency market on November 17, 2025?

The primary catalyst for the crypto market collapse was the sudden shift in investor expectations regarding the future monetary policy of the Federal Reserve, which, based on better-than-forecast US economic data, signaled the potential for a longer duration of restrictive policy. This change occurred after the publication of better-than-forecast economic data from the US (e.g., the New York Federal Reserve Empire State Manufacturing Survey index). Markets interpreted this as a signal that the Fed might maintain restrictive monetary policy longer than originally assumed.

How much did the price of Bitcoin fall after the collapse, and did it retain its 2025 gains?

Bitcoin's value dropped by 27% relative to its historical peak on October 6, and as a result of this collapse, the cryptocurrency erased all the gains it had made throughout 2025. Bitcoin (BTC) fell by 27% relative to the historical peak of October 6. On a weekly basis, it dropped by 13%.

What does the “death cross” mean in the context of Bitcoin’s technical analysis, and is it a good signal?

The "death cross" is a strong, bearish technical signal that formed on the Bitcoin chart during the crisis, signifying the 50-day moving average crossing below the 200-day moving average, classically foreshadowing long-term downward pressure on the market. This is a classic signal predicting long-term downward pressure on the market.

Did institutional investors refrain from purchases during the crisis?

Data on institutional capital flows clearly indicated a slowdown in demand, evidenced by a significant drop in BTC holdings in US ETF funds, alongside a noticeable lack of retail investor interest in "buying the dip." BTC holdings in US ETF funds fell from 441,000 BTC to 271,000 BTC. There was also a noticeable lack of interest in purchases from retail investors, who refrained from "buying the dip".

Disclaimer

This content is intended to enrich the readers' information and is for informational purposes only. It does not constitute financial, legal, or any other form of advice intended for specific use. Trading cryptocurrencies involves high risk and volatility. The historical performance of a given asset does not determine its anticipated future performance. Always conduct your own research and use cash you can afford to lose before making an investment. Any actions related to the buying and selling of Bitcoin and other asset investments....

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