Bitcoin Plunge Stirs Panic Again
The cryptocurrency market has once again plunged into panic. With Bitcoin's price falling below $91,500, investor confidence quickly eroded, and the market's "Extreme Fear" index surged to its highest level of the year. Industry insiders point out that the short-term selling wave may not be over yet, with some institutions even preparing for prices to drop to the $80,000 range.
This decline has wiped out all of Bitcoin's gains for the year and has hit retail and institutional investors who previously chased the rally. Trading data shows a significant increase in put options trading in the derivatives market, particularly focused on strike price ranges of $90,000, $85,000, and $80,000, indicating a widespread expectation that Bitcoin will continue to explore lower levels.
Collapse of Market Confidence Spares Few Institutional Investors
The shift in market sentiment happened almost overnight. Previously high-holding "believers" are now joining the selling ranks. Data shows that since early October, over $700 million has flowed into put contracts, betting on further Bitcoin declines by the end of November.
It is noteworthy that this round of declines has also severely impacted public companies that took a strategic approach to "digital reserve assets." Despite MicroStrategy buying another $835 million in Bitcoin, other companies have been forced to sell holdings to stabilize their balance sheets. This institutional level sell-off is amplifying the market's chain reaction.
Investors Caught in a "Fear Cycle"
Data shows that the cryptocurrency market's "Fear and Greed Index" has fallen into the "Extreme Fear" zone. Traders, lacking confidence support, are choosing to cash out and exit or purchase short-term hedge options.
Analysts from the decentralized finance research institution Ergonia state that investors who entered the market within the past six months are almost entirely trapped, with market "faith collapsing" and spot purchases weakening.
At the same time, other mainstream cryptocurrencies like Ethereum are also under pressure. Ethereum's price has dropped to $2,975, down over 24% since early October. Analysts point out that Ethereum, being tied to multiple reserve institution assets, has become one of the most affected tokens.
Macro Pressures Exacerbate Cryptocurrency Market Volatility
In addition to internal industry confidence crises, the macro environment is also deteriorating. The Federal Reserve's December rate cut expectations have fallen below 50%, and the market fears high interest rates will persist longer. Additionally, the S&P 500 index has dropped nearly 1%, and tech stocks have weakened, further diminishing investor interest in high-risk assets.
Kaiko analyst Adam McCarthy pointed out: "The market uncertainty brought by the AI bubble and the Federal Reserve's policy direction are delivering a double blow, with risk appetite continuously cooling off."
He warned that Bitcoin may still face selling pressure in the short term, especially before the U.S. tech stock earnings season arrives.
Market May Face a New Wave of Liquidation
Since early October, the cryptocurrency market has lost over $19 billion in market value, and open interest in small to mid-sized tokens like Solana has halved.
Kraken economist Thomas Perfumo believes that although this decline is not a structural crisis, it reflects a "global return to risk asset aversion."
He concluded: "This plunge is not only a growing pain for the crypto world but also a result of investors reassessing macroeconomic risks. The market may see a true rebuilding after a deeper adjustment."
