The first week of November 2025 has kicked off with a dramatic downturn in the crypto markets, triggering over $795 million in liquidations across major exchanges. Bitcoin, Ethereum, and top altcoins have all taken hits, shaking investor confidence and signaling a potential shift in market sentiment.

What Triggered the Liquidation Wave?

Several converging factors have fueled this sell-off:

• Federal Reserve Rate Cut: On October 29, the Fed slashed interest rates by 25 basis points and halted its balance sheet reduction (Quantitative Tightening). While this initially sparked optimism, the move ultimately boosted dollar strength, dampening crypto appeal.
• Bitcoin’s “Uptober” Break: Historically bullish, October ended with Bitcoin down 5%—its first “Uptober” loss since 2018. BTC fell from a high of $126,080 to around $107,000, breaking below the psychological $108,000 support level.
• Altcoin Volatility: Ethereum dropped nearly 6% to $3,680, XRP plunged 5% to $2.38, and Solana led the losses with a 6.5% dip to $41.20. These moves triggered cascading liquidations, especially among leveraged long positions.

Ethereum and Altcoins in the Crosshairs

Ethereum is facing a particularly volatile liquidation landscape:

• Short-Dominant Positioning: If ETH rebounds to $4,000, over $4.2 billion in short positions could be wiped out. A push to $4,300 could liquidate up to $8 billion.
• XRP Flash Crash: XRP saw a 41% intraday collapse in late October, falling from $2.77 to $1.64 before rebounding to $2.47. This was driven by automated futures liquidations and dried-up liquidity.

Market Sentiment and What’s Next

The mood across crypto X and trading desks is cautious:

• Fear Index Rising: The sudden drop has reignited fear, with traders pulling back from risk and favoring stablecoins or fiat.
• Institutional Interest Holds: Despite short-term pain, ETF inflows and institutional buying remain steady, suggesting a medium-term rebound if liquidity stabilizes.
• Altcoin Watchlist: Coins like Ethereum, XRP, and Solana are under close scrutiny. A sharp bounce could trigger massive short liquidations, flipping sentiment bullish again.

Final Thoughts

November’s liquidation storm is a wake-up call for traders riding high on leverage. With macro uncertainty, Fed policy shifts, and technical breakdowns converging, the crypto market is entering a phase of recalibration. Whether this is a temporary shakeout or the start of a deeper correction remains to be seen.