Bitcoin is on track to post its steepest monthly decline in more than three years, as renewed volatility grips the cryptocurrency market, evoking memories of the 2022 collapse that crippled major digital asset firms.
The flagship cryptocurrency slipped by as much as 6.4 per cent to $81,629 on Friday before staging a mild recovery to $84,166 as of 7:42 a.m. London time. Ether, the second-largest digital coin, also tumbled 7.6 per cent, falling below the $2,700 mark.
Data from Bloomberg show Bitcoin has lost about 23 per cent of its value in November, marking its sharpest monthly slump since June 2022.
The current downturn has drawn comparisons with the 2022 implosion of TerraUSD, the stablecoin created by Do Kwon, which triggered a domino effect across the industry. That chain reaction culminated in the dramatic collapse of Sam Bankman-Fried’s FTX exchange, erasing billions in investor funds and shaking global confidence in digital assets.
Despite a friendlier regulatory tone from the White House under U.S. President Donald Trump and increasing institutional participation, Bitcoin has now plunged more than 30 per cent from the all-time high it reached in early October.
The rout has been compounded by sweeping liquidations across the market. On 10 October, leveraged token bets worth $19 billion were wiped out, contributing to a loss of roughly $1.5 trillion in total crypto market capitalisation.
The pressure intensified in the past 24 hours, with CoinGlass reporting an additional $2 billion in leveraged positions liquidated. Institutional demand has also shown signs of cooling. A group of 12 U.S.-listed Bitcoin exchange-traded funds (ETFs) saw $903 million in net outflows on Thursday, their second-largest single-day redemption since launching in January 2024.
Similarly, open interest in perpetual futures has declined 35 per cent from its October peak of $94 billion, signalling a pullback in speculative trading.
Weakness in the wider financial markets has further weighed on sentiment. U.S. equities, which recently surged on optimism surrounding artificial intelligence after strong Nvidia earnings, have since retreated amid concerns over lofty valuations and uncertainty surrounding a potential Federal Reserve rate cut in December.
“Sentiment across the board is incredibly poor. There appears to be a forced seller in the market and it is unclear how deep this goes,” said Pratik Kala, portfolio manager at Australian hedge fund Apollo Crypto.
Earlier in the month, Bitcoin was trading around $107,500 despite a modest 2.2 per cent dip, as investors awaited key U.S. employment data. Ethereum fell 3 per cent to about $3,750 at the time, while several altcoins also struggled amid subdued trading activity.
Bitcoin’s ongoing decline underscores the fragility that still characterises the digital asset market, despite growing institutional involvement and broader acceptance. Investors and analysts are watching closely to determine whether the current slump marks a temporary correction or a deeper structural downturn.
