Analysis: The cryptocurrency market has shifted from a gradual decline to accelerated liquidation, and a rebound under multiple negative factors may be difficult to sustain

According to Bloomberg, Bitcoin briefly fell to nearly $62,000 over the weekend, hitting a new low since July. Unlike previous sudden crashes, this round of selling mostly occurred during relatively quiet trading periods, with prices continuing to decline until the recent days when leveraged liquidations accelerated significantly. Many small-cap tokens have retraced years of gains, and the expansion of institutional participation and the popularity of spot ETFs have not been able to prevent this round of decline.

Spot buying has weakened, while U.S. Treasury yields and the dollar have strengthened. From October 30 to November 13, nearly $3 billion flowed out of U.S. spot Bitcoin ETFs. Meanwhile, persistently high inflation has raised expectations for further tightening by the Federal Reserve, with the 10-year U.S. Treasury yield breaking above 5%, increasing the opportunity cost of holding non-interest-bearing assets like Bitcoin. The Binance hacking incident has reignited market concerns about the security of trading platforms, and the results of the U.S. midterm elections have added to policy uncertainty.

The Anthropic IPO may divert funds, but the scale is still unclear. Joshua Lim, co-head of market operations at FalconX, pointed out that discussions about the reasons for the decline have focused on two aspects: nearly $20 billion in stablecoin balances that have flowed out over the past month, and the potential impact of the Anthropic IPO on liquidity. Bloomberg noted that the IPO received a large number of subscriptions, and some investors may sell other holdings, including crypto assets, to raise funds, but it is currently unclear how much money has directly shifted from the crypto market to this IPO.

Bitcoin rebounded from below $65,000 in August to above $87,000 in late September after the U.S. Treasury announced an expansion of long-term Treasury buybacks, but it has now retraced most of those gains, with the market refocusing on the year-to-date low of about $58,000. Ayesha Kiani, Chief Operating Officer of Monarq Asset Management, believes that short-term trends mainly depend on whether institutional demand can stabilize and whether the macro environment can allow risk appetite to recover. Before that, any rebound may be difficult to sustain, and market volatility will remain high.