Bitcoin’s November Bloodbath: Are The Institutions Running For The Hills?

Let’s not sugarcoat this. The wheels are coming off. Bitcoin is staring down the barrel of its worst month since the spectacular implosions of 2022. Remember that? The whole TerraUSD house of cards built by Do Kwon, followed by the grand finale of Sam Bankman-Fried’s FTX exchange. We’re talking about a 23% haircut for Bitcoin in November alone.

The immediate damage report is brutal. Friday saw a 6.4% plunge to $81,629 before a weak recovery to $84,166. Ether didn’t fare any better, tumbling 7.6% to fall below the $2,700 mark. This isn’t a dip. This is a rout. The digital asset is now nursing losses of over 30% from its early October high, a period when institutional adoption and even a nod from the Trump White House were supposed to have built a new, more stable foundation.

That foundation looks like it was built on sand.

The trigger? Old-school crypto leverage. A cascade of liquidations began on October 10, vaporizing $19 billion in leveraged bets and wiping a staggering $1.5 trillion from the entire crypto market’s valuation. And just when you thought the worst was over, another $2 billion in leveraged positions got liquidated in the last 24 hours, according to data from CoinGlass. This is the market’s plumbing backing up, violently.

Look, the narrative this year was that the grown-ups had arrived. The launch of 12 spot Bitcoin ETFs in the US back in January was meant to be the final seal of approval. But the so-called “smart money” isn’t buying this dip. On the contrary, they’re sprinting for the exit. Those same ETFs saw net outflows of $903 million on Thursday. That’s the second-largest single-day redemption since they went live. Open interest in perpetual futures—a key gauge of speculative activity—has collapsed by 35% from its $94 billion peak in October. The party is over, and someone’s left with a massive bill.

Honestly, it reminds me of the Maginot Line. The French built this supposedly impenetrable wall of fortifications after World War I, believing it would stop any future German invasion. The Germans just… went around it. In 2024, the ETFs were crypto’s Maginot Line, a defense against the wild volatility of the past. But the attack didn’t come from a lack of institutional interest; it came from the same old flank: over-leveraged traders getting margin called into oblivion, a problem the ETFs did nothing to solve.

The broader market isn’t helping. The AI-fueled euphoria from Nvidia’s stellar earnings has evaporated from US stock markets. Wall Street is getting jittery about sky-high valuations and the growing doubt that the Federal Reserve will actually cut interest rates in December. When risk-off sentiment takes hold, Bitcoin is one of the first assets to be thrown overboard.

“Sentiment is extremely weak across the board,” noted Pratik Kala, a portfolio manager at Australian hedge fund Apollo Crypto. “There seems to be a forced seller in the market, and it’s still unclear how deep this pocket is.”

And that brings us to the elephant in the room: Michael Saylor’s MicroStrategy. Tony Sycamore, an analyst at IG Australia, pointed out that the market might be actively trying to test the company’s breaking point. This is a huge deal. A further slide toward MicroStrategy’s break-even price on its massive, leveraged Bitcoin holdings could trigger margin calls. The company’s stock, which is effectively a proxy for Bitcoin, dropped 5% on Thursday. If that domino falls, things could get very, very ugly. It’s all gone a bit pear-shaped, and we are definitely not out of the woods yet.