idcrypt - Global cryptocurrency markets endured a sharp correction on Monday, erasing nearly $182 billion in market capitalization within 24 hours. Bitcoin, the flagship digital asset, tumbled almost 5% to a low of $105,540 before recovering slightly to $107,149. The overall crypto market value now stands at around $3.6 trillion, signaling a fragile investor mood amid renewed uncertainty from the U.S. Federal Reserve.
The sell-off came just days after Fed Chair Jerome Powell suggested that a December rate cut is not guaranteed, tempering investor optimism for near-term monetary easing. This statement, delivered during his recent remarks in Washington, led markets to recalibrate expectations. Before Powell’s comments, futures markets had priced in a 96% probability of a rate cut at the December FOMC meeting — that figure plunged to below 70% after his press conference, according to eToro analyst Simon Peters.
Crypto Market Capitalization and Bitcoin Price
Source: CoinGlass, DefiLlama (Data as of Nov 4, 2025)
This shift in sentiment rippled across global financial markets. Equities wavered, yields climbed, and digital assets suffered a steep downturn. The sudden loss of momentum in crypto reflects how deeply intertwined the sector has become with macroeconomic expectations, particularly those tied to liquidity and risk appetite in the broader economy.
According to CoinGlass, Monday’s price plunge triggered more than $1 billion in liquidations across 303,000 trading positions. Bitcoin and Ethereum futures were among the hardest hit, underscoring the leverage-heavy nature of recent speculative activity. Traders betting on continued upward momentum found themselves forced out of positions as cascading margin calls amplified the decline.
Adding to the pressure, data from DefiLlama showed that Bitcoin exchange-traded funds (ETFs) saw $800 million in net outflows last week, suggesting that institutional traders are locking in profits or shifting exposure away from spot products amid tightening liquidity conditions. This behavior marks a cautious retreat after months of strong ETF inflows that helped Bitcoin climb to record levels earlier in the year.
Despite the bloodbath, several analysts maintain that this correction could represent a temporary setback rather than the start of a prolonged bear phase. “Markets are still fundamentally healthy,” noted Tom Lee of Fundstrat Global Advisors in an interview with CNBC. He believes that Bitcoin’s consolidation phase is nearing its end and that the token could rally before year’s end, supported by strong on-chain activity and the ongoing boom in stablecoin issuance.
Stablecoins — such as USDT, USDC, and FDUSD — have continued to expand, with total supply rising over $170 billion in 2025. This liquidity base often acts as a buffer, allowing capital to reenter risk assets when macro conditions stabilize. Analysts view this as a critical foundation for renewed momentum once investors regain confidence.
Simon Peters also emphasized that upcoming U.S. labor market data could play a pivotal role. “Signs of a cooling labor market might reinforce expectations for a December rate cut and help restore ‘risk-on’ sentiment,” he said. If job growth slows or wage pressures ease, the Fed could pivot toward a more accommodative stance, which typically benefits cryptocurrencies and other high-beta assets.
However, volatility remains elevated. The CBOE Volatility Index (VIX) climbed to 21.5 on Monday, its highest level since late September, while implied volatility for Bitcoin options surged over 15% in a single session. This surge in hedging activity signals that traders anticipate larger price swings ahead, particularly as macroeconomic uncertainty lingers.
Meanwhile, some investors are looking for opportunities amid the chaos. “Liquidity will likely surge back into the crypto market over the coming weeks,” wrote David Brickell and Chris Mills from the London Crypto Club. They argued that Bitcoin may soon “reconnect to the broader risk picture” and retest record highs if macro conditions stabilize.
This perspective aligns with a broader view among institutional traders that crypto remains a long-term growth story, driven by global adoption, improving regulation, and technological innovation. With the next Bitcoin halving approaching in 2028’s mid-cycle phase and continued inflows into blockchain-based funds, the long-term trajectory remains upward despite near-term turbulence.
For now, the $182 billion wipeout serves as a reminder of crypto’s inherent volatility — and how deeply its fate is tied to central bank policies. As Powell’s caution ripples through markets, traders are watching every data release and policy signal, knowing that the line between fear and optimism can shift in a single sentence from the Fed.
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