The cryptocurrency market has once again experienced a sharp decline, with top-ranking digital assets suffering significant losses. On November 5, data from CoinGecko showed a broad-based sell-off, with Bitcoin briefly falling below $100,000 to a low of $99,075.89, while Ethereum plunged over 15% within 24 hours, nearing the $3,000 mark. Analysts attribute Bitcoin’s latest drop to cooling market sentiment and deleveraging, suggesting that only after leverage unwinds and capital outflows ease can sentiment gradually recover.
During the day, Bitcoin hit a low of $99,075.89, marking a more than 20% decline from its all-time high of $126,080 on October 6. Ethereum led the losses, down nearly 35% from its August 24 peak of $4,946.05. Other major altcoins like Ripple (XRP) and Binance Coin (BNB) also saw varying degrees of declines.
By the afternoon, Bitcoin pared some losses, recovering slightly from its morning slump. As of 17:55 on November 5, Bitcoin traded at $101,905, down 1.7% in 24 hours, while Ethereum stood at $3,307.12, down 5.4%.
This marks the first time Bitcoin has dipped below $100,000 since May 2025. The cryptocurrency market has been volatile since October, with Bitcoin hitting a record high of $126,080 on October 6 before entering a downtrend. On October 11, Bitcoin’s intraday swing exceeded 20%, plummeting from $120,000 to just above $100,000, sparking market concerns. The decline continued into November.
Yu Jianing, co-chair of the Blockchain Committee of the China Communications Industry Association, explained that the latest plunge stems from weakening sentiment and forced deleveraging. Macro factors, including a 0.53% drop in the Dow, a 1.17% decline in the S&P 500, and a 2% slump in the Nasdaq—with Tesla and Nvidia falling 5% and nearly 4%, respectively—have dampened risk appetite. The broader retreat from risk assets has particularly impacted highly volatile digital assets.
Yu noted that the Crypto Fear & Greed Index has dropped to 20, a six-month low, signaling capital flight from riskier assets. With U.S. stocks weakening and confidence in high-valuation assets shaken, inflows into digital assets have dwindled. Bitcoin and Ethereum spot ETFs have mostly seen net outflows since mid-October, further undermining price support.
The immediate trigger for the sell-off lies in leverage and liquidity. According to Coinglass, over the past 24 hours as of November 5, 438,736 traders were liquidated, totaling $1.719 billion (approximately RMB 12.3 billion), with long positions accounting for 76% of the losses. The largest single liquidation occurred on Hyperliquid’s ETH-USD pair, worth $26.0635 million.
"This is a classic cascade in crypto markets: price breakdowns trigger margin calls, forced liquidations, and further declines," Yu explained.
He views Bitcoin’s slump as a liquidity-driven correction, with sentiment recovery contingent on deleveraging and stabilized outflows. Short-term risks hinge on three factors: U.S. stock market risk appetite, global liquidity shifts and dollar rate expectations, and whether capital flows and trading activity in digital assets rebound.
Notably, domestic cryptocurrency trading has long been classified as illegal financial activity in China. Pan Gongsheng, Governor of the People’s Bank of China, reiterated at the 2025 Financial Street Forum that policies banning virtual currency transactions remain in effect. Authorities will continue cracking down on such activities to safeguard financial stability.
Yu cautioned investors that digital assets remain high-risk investments, with price volatility and underlying mechanisms starkly different from traditional assets. Market sentiment cycles are short, and risks often accumulate rapidly when optimism and trading volumes peak.