$1.1T Crypto Wipeout Ends High-Leverage Era

Between October 6 and November 17, digital asset venues shed approximately $27 billion in value per day, according to Perera’s analysis. Bitcoin, the bellwether cryptocurrency, plummeted from its October peak of $126,270 to a November low near $93,000, representing a 25% decline that technically qualifies as bear market territory. The pain extended across the entire crypto spectrum, with Ethereum (ETH) dropping more than 12% in the last seven days to trade near $3,200, while majors like XRP, BNB, and Solana (SOL) declined between 8% and 17% over the same period, per CoinGecko data.

The root cause of this structural contraction was a trading arena oversaturated with leverage. Derivatives data revealed how exposed the crypto space had become, with open interest in BTC perpetual futures climbing above $40 billion by early October and funding rates signaling extreme long positioning. Perera explained that with traders employing leverage ratios of 50x or even 100x, a mere 1-2% adverse price movement was enough to trigger automatic liquidations. When macro pressures hit—including tightening dollar liquidity, a 43-day U.S. government shutdown, and trade frictions—these high-leverage long positions began to unwind catastrophically.

The liquidation event on October 10 alone resulted in the loss of approximately $19.2 billion, marking the largest forced closure in crypto history. The stress continued into mid-November, with BTC dipping to just above $93,000 on November 16 after trading near $106,500 earlier in the same week. This decline occurred even as U.S. Treasury Secretary Scott Bessent hinted that a U.S.-China trade deal could be signed before Thanksgiving, demonstrating the market’s vulnerability to leverage-driven selling pressure.

According to Perera’s report, which echoed previous analysis from K33 Research, Bitcoin’s famous four-year halving rhythm has been ‘invalidated’ by the rise of spot ETFs and deepening institutional strategies ranging from basis trades to treasury holdings. Instead of depending on retail-driven fluctuations, BTC now reacts more directly to dollar liquidity, interest-rate expectations, and equity volatility. This represents a fundamental shift in how cryptocurrency markets function, moving from speculative retail-driven patterns to institutionally influenced behavior.

The Kobeissi Letter mirrored this assessment, describing the crypto market developments as a ‘structural move’ pointing to a new regime where leverage and liquidations dictate market behavior. However, the financial commentary account reminded followers that new highs have eventually followed every 25%+ drop in crypto history, providing historical context for the current downturn. This perspective suggests that while the market structure has changed, the potential for recovery remains intact based on historical patterns.

Meanwhile, on-chain and sentiment data hint that the market may be transitioning from forced selling to quiet accumulation. The Fear and Greed Index fell to 10 over the past weekend, its lowest reading since February, indicating extreme fear among market participants. Simultaneously, stablecoin supply has expanded by nearly $20 billion this year, creating significant dry powder that often enters the market after sharp corrections. This combination of extreme fear and growing stablecoin reserves suggests the conditions for a potential market bottom may be forming.

The $1.1 trillion wipeout represents more than just a market correction—it signals a fundamental transformation in how cryptocurrency markets operate. The era of extreme retail leverage appears to be giving way to more sophisticated institutional participation, with spot ETFs and professional trading strategies increasingly dictating market dynamics. This shift away from high-leverage retail speculation toward institution-driven patterns may ultimately lead to more stable, though potentially less volatile, market conditions.

The structural reset described by Perera and supported by analysis from K33 Research and The Kobeissi Letter indicates that cryptocurrency markets have matured to the point where traditional financial factors like dollar liquidity and interest-rate expectations now play a more significant role than the historical halving cycles that previously dominated Bitcoin’s price action. This evolution suggests digital assets are becoming more integrated into the global financial system, with implications for both risk management and investment strategy in the emerging institutional crypto era.