Bitcoin experienced a slight upward movement, reaching just above $88,000 on Monday, although it lagged behind the more pronounced recovery seen in US equity markets. The cryptocurrency is still attempting to recover from a significant selloff last week, indicating a cautiously optimistic mood among traders without strong bullish momentum.
After plunging to a seven-month low of $80,554 last Friday, Bitcoin managed a recovery over the weekend but remained up less than 1% to approximately $88,400 by Monday. In contrast, smaller cryptocurrencies showed more significant gains, with XRP rising about 7% and Solana increasing around 3%.
Despite Bitcoin’s minor uptick for a second consecutive day, market participants aren’t celebrating. The broader cryptocurrency market remains in a downturn, which persists despite increasing institutional adoption and recent supportive policies from US President Donald Trump, who has taken a pro-industry stance.
Global equities, notably driven by technology stocks, showed advancement on Monday as investors were buoyed by increasing optimism that the Federal Reserve might lower interest rates in December. Shiliang Tang, managing director of Monarq Asset Management, commented on the challenges facing the crypto market, noting the absence of a broader “alt season,” reduced liquidity, and Bitcoin’s underperformance relative to equities, which make it challenging to allocate substantial capital into purely crypto strategies.
In the crypto options market, there is heightened interest in downside protection as traders buy put options, particularly at the $80,000 strike price, which have become more popular than those at $85,000. This trend reflects a concerning shift in market sentiment, with demand for bearish positions outstripping bullish ones.
CryptoQuant has reported that the Bitcoin funding rate has turned negative recently, indicative of bearish sentiment in the perpetual futures market, a stark contrast to the earlier positive figures. This shift suggests a growing conviction among traders that digital assets are in a deeper slump, with many betting against Bitcoin’s recovery potential.
Should this trend continue, November could become Bitcoin’s worst month since the impactful corporate failures that battered the crypto market in 2022, particularly marking the collapse of Sam Bankman-Fried’s FTX exchange. Research analyst Adam McCarthy from Kaiko indicated that any resurgence for Bitcoin—potentially aiming for the $100,000 mark—may hinge on anticipated rate cuts, with delays in this process prolonging the time required for a return to significant highs.
At present, Bitcoin is approximately 30% below its record high reached last month. Open interest in perpetual futures remains notably low, sitting 36% below its October peak of $94 billion. Additionally, there has been a notable withdrawal of over $3.5 billion from US-listed Bitcoin exchange-traded funds (ETFs), vehicles that have played an essential role in influencing Bitcoin’s price since their introduction.
The current downturn has unfolded against a backdrop of substantial institutional participation, shifts in policy, and broader economic pressures. In a recent note, Deutsche Bank AG analysts highlighted the unique nature of this year’s market struggles compared to previous downturns driven primarily by retail speculation.
Adding to the cautious sentiment, realized losses among short-term Bitcoin holders—those with coins held for less than 155 days—have surged to approximately $630 million per day, the most significant losses recorded since the June 2022 decline. Analysts at Glassnode pointed out that this high level of loss realization underscores the dense top structure formed within the $106,000 to $118,000 range. They suggested that either stronger demand is necessary to absorb the forced selling, or the market might require an extended accumulation phase to stabilize.
