Veteran Investors Signal an Extended Downturn

Bitcoin plunged 23% in November, marking its worst month since 2022, as prominent investors warn that the cryptocurrency downturn is only getting started. Partners at Placeholder VC and Alliance DAO are signaling that a significant period of selling pressure lies ahead for the market.

Chris Burniske of Placeholder VC solidified his bearish stance after a market-shaking event on October 10, which he argued “broke crypto for a while.” He suggested that building a sustained bid would be difficult after such a meltdown. While Bitcoin and Ethereum have maintained elevated price ranges, Burniske pointed to developing cracks in the market, including a slip in MicroStrategy’s stock and warning signs from gold and credit markets.

This pessimism was echoed by Qiao Wang of Alliance DAO, who reiterated his September prediction. He believes a large group of new investors who bought into spot Exchange-Traded Funds (ETFs) will need to liquidate their positions before the market can resume a major upward trend.

Adding to the concern, one observer noted that a major Bitcoin ETF’s cost basis sits around $80,500, warning of a potential acceleration in outflows. In a contrarian take, veteran trader Peter Brandt suggested this sell-off is the best thing that could happen to Bitcoin long-term. While Brandt has reduced his holdings, he predicted the next bull market could drive Bitcoin to $200,000 by the third quarter of 2029.

Institutional Retreat and Forced Selling

The selling pressure has intensified, with 12 US-listed Bitcoin ETFs experiencing $903 million in net outflows on a single Thursday—their second-largest redemption day since launching in January 2024. According to Bloomberg, open interest in perpetual futures has plummeted 35% from its October peak of $94 billion, and institutional investors appear hesitant to buy during the dip.

This market rout follows a wave of liquidations on October 10 that erased $19 billion in leveraged positions and wiped out approximately $1.5 trillion from the total crypto market capitalization. Ether also fell sharply, dropping below $2,700 as liquidations surged past $1 billion.

Pratik Kala, a portfolio manager at Apollo Crypto, commented on the situation, noting the presence of a potential forced seller in the market. “Sentiment across the board is incredibly poor,” he said.

Historical Patterns and Market Analysis

Analyst Michael Van De Poppe identified October 10 as a critical turning point, stating that “something broke down terribly” on that day, with the effects still visible in Bitcoin’s behavior. The last time Bitcoin saw comparable monthly losses was in the wake of the TerraUSD collapse in May 2022, which triggered a cascade of failures across the industry.

Benjamin Cowen, CEO of Into The Crypto, reminded investors that bear markets are a normal part of the cycle. He observed that Bitcoin has historically peaked in the fourth quarter of the post-halving year and found a bottom about a year later. “Trade the market you have, not the market you want,” he advised.

The broader financial environment has offered little relief, as US stocks have given up recent gains amid concerns over high valuations and uncertainty about a Federal Reserve rate cut. With no clear bottom in sight, the crypto sector continues to face mounting pressure as the bear market unfolds.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial advice, investment advice, or any other sort of advice. You should not treat any of the website’s content as such. Always conduct your own research and consult with a professional financial advisor before making any investment decisions.