Crypto Selloff Intensifies as Macro Fears Mount

Bitcoin’s dramatic decline saw the world’s largest cryptocurrency tumble to approximately $92,200, marking its lowest level since late April and representing a 2.3% drop over 24 hours. More significantly, Bitcoin has plunged more than 14% over the past two weeks, completely erasing all gains accumulated throughout 2025. According to crypto markets data provider CoinGecko, this represents one of the most severe corrections since Bitcoin began its rally from October 2024 lows. The downturn wasn’t isolated to Bitcoin alone, with Ethereum, the second-largest cryptocurrency by market value, falling to roughly $3,000—a 2% decline since Sunday that saw it touch $2,960 at one point, its lowest level in four months.

The carnage extended across the broader crypto market, with Solana dropping 4.4%, Dogecoin falling 3.7%, and XRP declining 2%. The synchronized nature of the selloff suggests a market-wide risk aversion rather than cryptocurrency-specific concerns. Traditional markets mirrored this pessimism, with the technology-focused Nasdaq and the S&P 500 both closing down by approximately one percentage point, continuing their recent slides. Crypto-focused stocks suffered even more severe losses, with exchange giant Coinbase tumbling more than 7% as the digital asset downturn weighed heavily on companies with crypto exposure.

Juan Leon, senior investment strategist at asset manager Bitwise, explained to Decrypt that “the current drawdown across digital assets reflects a broader risk-off rotation driven by a convergence of macro headwinds.” The primary concern centers on shifting expectations for U.S. interest rates, with markets now pricing in a lower probability of a December rate cut from the Federal Reserve. This recalibration of liquidity expectations has removed a key support for risk assets, including cryptocurrencies that typically benefit from accommodative monetary policy.

Compounding these interest rate concerns is what Leon described as “risk-off contagion from the correction in the AI sector that is spreading across all risk assets.” Investors are increasingly worried about the financial commitments of powerhouse companies like Google and Microsoft to artificial intelligence initiatives, which could weigh on their balance sheets in the near term. This anxiety about tech spending comes alongside broader concerns about the U.S. economy, including missing figures from October jobs and inflation reports and ongoing trade war tensions, creating a perfect storm of uncertainty that has buffeted markets in recent weeks.

The market downturn triggered massive liquidations across cryptocurrency derivatives markets, with Coinglass data showing investors liquidated more than $900 million in positions over the past 24 hours alone. Notably, more than $550 million of these liquidations came from long positions—bets that prices would rise—indicating that leveraged traders were caught off-guard by the severity of the selloff. Maja Vujinovic, CEO at Ethereum treasury FG Nexus, told Decrypt that “some whales and miners have been selling into strength, and once the price broke key levels, leveraged longs started getting liquidated across derivative markets, which sped up the drop in price.”

This cascade of liquidations created a feedback loop that accelerated the downturn, as forced selling from liquidated positions put additional downward pressure on prices. However, Vujinovic struck a somewhat reassuring note, adding that “overall, this is more short-term de-risking and position resets rather than a structural change in thesis.” The sentiment among market participants suggests that while the immediate pain is significant, the fundamental outlook for cryptocurrencies may not have permanently shifted.

Market participants appear divided on whether the current downturn represents a temporary correction or the beginning of a more sustained bear market. A Myriad predictions market, owned by Decrypt’s parent company Dastan, shows 60% of respondents expect Ethereum to trend lower to $2,500 rather than rally to $4,000—a reversal of last week’s trendlines that reflects growing pessimism about crypto markets in the near term.

Yet not all voices are pessimistic. Stephane Ouellette, CEO and co-founder at crypto-focused services firm FRNT Financial, struck an upbeat note in his message to Decrypt, noting that Bitcoin was only “roughly around its uptrend line from the rally which began in October of 2024.” He characterized the correction as “normal course” volatility and suggested that “it would also be normal to see a sharp move lower and quick recovery as is typical of crypto markets.” Perhaps most optimistically, Ouellette added that “our models continue to suggest we are roughly halfway through the market cycle and are yet to see the extreme levels and volumes that have been typical at price-cycle tops in both 2017 and 2021,” implying that despite the current pain, the broader bull market may still have room to run.