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The shine of digital gold dims as Bitcoin, falling below $90,000 for the first time in seven months, faces dual tests from macro interest rate policies and internal market structure.
On November 18, the price of Bitcoin broke below the key psychological level of $90,000, touching a low of $89,288.7. This marks the first time it has fallen below this line since April of this year.
This decline means Bitcoin has retreated nearly 30% from its historical high of $126,199 in early October, erasing all gains made this year.
This drop in Bitcoin is not merely a simple price correction but has shaken the very foundation of the entire cryptocurrency market. According to market data, the total global cryptocurrency market cap has shrunk by 25% from its peak of $4.379 trillion in early October to approximately $3.282 trillion, evaporating over $1 trillion in value.
The price drop was accompanied by large-scale liquidations. Coinglass data shows that in the past 24 hours, over 175,000 investors in the cryptocurrency market experienced liquidations, with total liquidation amounts reaching $935 million. Long position liquidations accounted for $650 million, significantly higher than short position liquidations of $280 million, indicating that bullish forces in the market are nearing a breaking point.
This round of Bitcoin's decline is the result of a combination of macro pressures, policy uncertainty, and internal market structural issues.
On the macro level, the sharp shift in the Federal Reserve's monetary policy outlook is the main driver. As market expectations for a Fed rate cut in December fell below 50%, investors began systematically withdrawing from high-risk asset positions. The weakening rate cut expectations directly altered capital cost expectations. The continued decline of the crypto market after losing the $100,000 level is essentially an inevitable result of the fading liquidity premium.
Internal market structure also has issues. After hitting new highs, Bitcoin lacked sustained new capital inflows. Highly leveraged long positions were unwound collectively during volatility, exacerbating short-term selling pressure. Simultaneously, recent net inflows from institutional funds have declined, and some small-to-medium miners cashed out early to maintain cash flow.
Geopolitical factors also played a role. Starting October 11, influenced by US President Trump's statements on tariffs, global risk assets generally faced pressure. Subsequently, the US government shutdown set a historical record, and coupled with increased uncertainty regarding fiscal and monetary policy prospects, market concerns about the liquidity environment intensified further.
Market attention on Bitcoin's four-year cycle is significantly increasing. The current time window is approximately 400 to 600 days after the last halving. Historically, this period coincides with Bitcoin's price reaching cyclical peaks.
This cyclical behavior stems from Bitcoin's inherent characteristics: halving events reduce the supply of new blocks, while demand gradually increases over time, traditionally leading to prices peaking about 12-18 months after the halving.
From a market psychology perspective, after Bitcoin set new historical highs, long-term holders tend to take profits, releasing a large supply into the market. The price drop may be the result of profit-taking, shrinking liquidity, and macro pressures combined.
It is worth noting that this round of selling occurred simultaneously with a global risk asset correction. The US tech stock sector recently faced a pullback, 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 fluctuations.
The market shows significant divergence regarding Bitcoin's future trajectory. BitMEX co-founder Arthur Hayes warned that Bitcoin falling from $125,000 to the $90,000 range while US stocks remain at historical highs suggests a credit event is brewing.
Hayes further pointed out that the US dollar liquidity index has weakened significantly since July. If the market deteriorates further, the Federal Reserve, Treasury, or other institutions might be forced to accelerate money printing to maintain stability. In such a scenario, Bitcoin could fall back to the $80,000 - $85,000 range.
Pessimistic views suggest that if Bitcoin's price remains below $100,000, it could trigger a steeper sell-off. Market analyst Damian Chmiel stated that the next target would be the low near $74,000 seen in April, implying a potential downside of about 30% from current levels.
Despite recent market turmoil, some Wall Street institutions remain optimistic. Fundstrat's Tom Lee predicts Bitcoin could soar to $150,000 - $200,000 by the end of 2025. He noted that just weeks ago, the market experienced a historic liquidation larger than the FTX exchange collapse, but this has not shaken his long-term confidence.
On the morning of November 19, the Bitcoin price had recovered to the $92,000 range.
