Author: Nancy, PANews
The cryptocurrency market experienced significant volatility in November. In the early hours of November 5th, Bitcoin broke below the key psychological level of $100,000, hitting a nearly five-month low. Altcoins subsequently plummeted, and market panic quickly escalated.
Bitcoin is facing a capital outflow, with long-term holders significantly reducing their positions.
The weakness in Bitcoin's performance is not solely due to macroeconomic uncertainties; the key factor is a shift in the money supply.
According to CryptoQuant data, long-term Bitcoin holders have sold over 327,000 BTC in the past 30 days. Since the beginning of October, funds have shown a continuous net outflow trend, with selling pressure from long-term holders remaining relatively stable at around 300,000 BTC, reflecting weak market confidence and liquidity pressure. Although Bitcoin attempted to rebound several times in mid-to-late October, each upward movement was accompanied by significant fund outflows, indicating a lack of new funds supporting the rebound and insufficient market buying momentum.
Meanwhile, subtle changes have emerged in ETF market fund flows. According to SosoValue data, US Bitcoin spot ETFs saw a net inflow of $3.42 billion in October, providing strong support for Bitcoin's spot price at the beginning of the month. However, the situation reversed towards the end of the month, with a net outflow of $1.33 billion in just four days. BlackRock's IBIT saw the largest single-day redemption, reaching $291 million, marking the largest single-day outflow since early August. ETF fund flows are often seen as a "thermometer" of institutional sentiment; the current changes indicate that institutional investors have clearly shifted to a more cautious short-term stance, and market optimism is cooling.
Similar signs are also appearing at the listed company level. SosoValue data shows that in October, global listed companies (excluding mining companies) made a net purchase of approximately 7,251 BTC. However, behind this seemingly stable figure lies a structural change: about 85.1% of the buying was concentrated in the first week of the month, after which the pace of purchases slowed significantly. Major buyers, including Strategy and Metaplanet, generally slowed down their buying spree.
Therefore, the current scale and sustainability of new Bitcoin funds are insufficient to offset the continued selling pressure from long-term holders, and the market's supply and demand structure is facing a temporary imbalance.
Mining companies and institutions are under collective pressure, and the market has entered a cost-based game.
Bitcoin's recent price movements have once again put market nerves on edge. With Bitcoin falling below the $100,000 mark, pressure from multiple sides is gradually emerging. Although there hasn't been a panic sell-off in the overall market, multiple signals indicate that Bitcoin is at a critical juncture, undergoing a struggle around cost lines and a structural test.
According to data from MarcoMicro, as of November 4th, the average production cost of Bitcoin had risen to approximately $114,000. This means that the mining costs for most mining companies are already higher than or close to the market price. At current price levels, many mining companies are not only facing a sharp decline in mining profits but also need to cope with additional cost pressures such as sales, administration, and energy. Cost reduction has become the top priority for mining companies to maintain operations. If market demand shrinks further, some mining companies are beginning to seek business diversification to hedge against cyclical risks, including shifting towards AI infrastructure construction and computing power leasing businesses.
Institutional holders are also under significant pressure. SosoValue data shows that among 38 publicly listed companies globally holding Bitcoin, at least 24 have seen their holdings fall below cost, including Metaplanet, Bullish, Galaxy Digital, and Next Technology. Even leading institutions are struggling to maintain paper profits in the current range, and some smaller Bitcoin-backed companies are even initiating selling due to liquidity pressures. For example, Sequans, a US-listed Bitcoin treasury company, confirmed the sale of 970 Bitcoins to reduce debt.
From a technical perspective, many industry insiders believe the market still faces further downside risks in the short term. Katie Stockton, founder of Fairlead Strategies, pointed out that Bitcoin has broken below the key 200-day moving average (approximately $109,800). The 200-day moving average is one of the most widely followed indicators defining long-term trends and also acts as a support level for Bitcoin. This could indicate further downside for the cryptocurrency, with the next target potentially at $94,200. Markus Thielen, CEO of 10x Research, recently stated that Bitcoin is approaching the support line established since the October 10th crash. A break below $107,000 could see a drop to $100,000. Matrixport analysis indicates that Bitcoin is currently approaching the 21-week moving average, an indicator that has historically served as a reversal signal multiple times. While the current trend may suggest further downside potential, it does not signify the end of the trend. This reminds investors that instead of being swayed by short-term market fluctuations, it is better to refer to time-tested indicators as a stable basis for decision-making.
Structural adjustments in Bitcoin supply and demand present initial opportunities for patient investors to build positions.
Market sentiment isn't entirely pessimistic. Glassnode data analysis indicates that Bitcoin maintained a range-bound trading pattern this week, with improved market momentum but slower capital inflows. ETF outflows and declining profitability suggest the market is in a relatively balanced consolidation phase. Since July, Bitcoin has repeatedly encountered resistance at the cost basis of high-level buyers, indicating heavy selling pressure above, and a potential short-term retest of the key support zone around $104,000. Historically, periods of pressure or even capitulation among short-term holders often present attractive entry opportunities for patient investors.
Wintermute points out that while global liquidity is expanding, funds are not flowing into the cryptocurrency market. ETF inflows have stagnated since the summer, with BTC ETF assets under management hovering around $150 billion, and DAT activity has dried up. The four-year cycle concept is no longer applicable to mature markets; the current market structure is healthy, leverage has been cleared, and positions are well-balanced. Liquidity is the key driver of performance. Wintermute will closely monitor ETF inflows and DAT activity, as these will be important signals of a return of liquidity to the cryptocurrency market.
Bitwise Chief Investment Officer Matt Hougan stated that although Bitcoin's drop below $100,000, hitting a new low since June and sparking concerns about a crypto winter, he believes the current market is closer to a bottom than the start of a new long-term bear market. Retail investors are currently in a state of extreme despair, with frequent leveraged liquidations and market sentiment at record lows; however, institutional investors and financial advisors remain bullish, continuing to invest in Bitcoin and other crypto assets through ETFs. Institutions are becoming the main driving force in the market. Retail crypto investor selling is nearing exhaustion, and he believes the bottom for Bitcoin is imminent, and sooner than expected. He believes Bitcoin still has a chance to reach new highs this year, potentially rising to the $125,000 to $130,000 range, and even reaching $150,000 if the market performs well. With continued growth in institutional buying, the next phase of the crypto market will be driven by more rational capital.
BitMEX founder Arthur Hayes published a new lengthy article stating that the US Treasury and the Federal Reserve are brewing a "stealth QE," which could be a key catalyst for a new round of price increases in Bitcoin and the crypto market. Currently, the US government is expanding its spending, preferring to issue bonds rather than raise taxes. Foreign central banks are more inclined to buy gold due to the risks of dollar assets, the US private savings rate is insufficient to support Treasury bond issuance, and the four major commercial banks have only absorbed a small portion of new debt. "Relative value hedge funds" have become marginal buyers of US Treasuries, using repurchase agreements to leverage financing for bond purchases. The US Treasury expects to issue approximately $2 trillion in new debt annually to cover the deficit. When liquidity is tight, the Federal Reserve injects funds into the market through the standing repurchase mechanism, equivalent to "QE in disguise." As the use of this mechanism increases, global dollar liquidity increases, with an effect equivalent to QE. Hayes predicts this will reignite the bull market in Bitcoin and the crypto market. Currently, the government shutdown and Treasury bond auctions have led to a short-term tightening of liquidity. He advises investors to preserve capital and wait for the right opportunity, stating that the market will rebound strongly after the "stealth QE" is launched.
From the perspective of on-chain funds and coin holding structure, the current Bitcoin market is undergoing a structural test of supply and demand imbalance. According to on-chain data analyst @Murphy , Bitcoin is currently experiencing a "structural test" of supply and demand imbalance, with long-term holders continuously selling in large quantities, while market demand is insufficient to fully absorb this selling pressure. These holders are selling because they still have high profits, but as prices fluctuate and correct, their profit margins are being compressed. Historically, when the average daily distribution from long-term holders drops below 15,000 coins, the market usually stabilizes. Now that their profit-loss ratio has fallen below the "warning line," their motivation to sell will significantly decrease, and market pressure will ease. Following past patterns, this adjustment period may last for another 1-2 months, during which time trend trading entry opportunities may emerge.
CryptoQuant CEO Ki Young Ju points out that the current unrealized profits of whales are not high, indicating that the market has not yet entered a frenzy phase, or that the expansion of the Bitcoin market makes it difficult to achieve high profit margins again. Meanwhile, Bitcoin's hashrate continues to reach new highs, and mining companies are still expanding, showing clear long-term bullish signals. Current demand mainly comes from ETFs and Strategies, but buying from both has recently slowed. If growth resumes, market momentum may restart. Short-term whales (mainly ETFs) are close to breaking even, while long-term whales have gained approximately 53%. The traditional four-year cycle is weakening, and the future source and scale of liquidity are more difficult to predict. Furthermore, the average cost of holding Bitcoin is approximately $55,900, with holders averaging a 93% profit. On-chain fund inflows remain strong, but the main reason for price stagnation is weak demand, rather than selling pressure.
Crypto investment firm QCP Capital points out that the recent sell-off lacked clear macroeconomic drivers, even with other risk assets performing well despite favorable policies. Over the past month, the market absorbed approximately 405,000 Bitcoins from OG holders, and the price did not fall below $100,000. Although some listed companies have slowed their holdings and some smaller digital asset reserve companies have sold off, the spot price remains supported. Currently, long-term holders are taking profits, and institutional inflows and application promotion are consolidating the market foundation.
