Crypto crashes 3.7 per cent despite US shutdown deal: US$260M liquidations and whale exodus trigger sell-off

Crypto crashes 3.7 per cent despite US shutdown deal: US$260M liquidations and whale exodus trigger sell-off

The past 24 hours have exposed the fragility beneath recent crypto market gains, delivering a sobering reminder that sentiment can shift abruptly even amid macroeconomic progress. At first glance, the backdrop appears favourable. The US Senate passed a government funding bill on Monday evening, November 10, that would extend operations through January, marking a decisive step toward ending what has become the longest government shutdown in American history.

With a 60 to 40 vote, the chamber cleared the path for the measure to advance to the Republican-controlled House, where Speaker Mike Johnson signalled readiness to pass it swiftly and forward it to President Donald Trump for signature. This legislative breakthrough should, in theory, stabilise risk sentiment and restore confidence in the continuity of US fiscal governance.

The market’s reaction has been conspicuously muted, even negative. While US equities closed mixed on Tuesday, with the Dow surging 1.18 per cent, the S&P 500 edging up just 0.21 per cent, and the Nasdaq slipping 0.25 per cent, the crypto market tumbled by 3.67 per cent over the same 24-hour window. This divergence underscores a growing decoupling between legacy risk assets and digital ones, at least in the short term.

The Nasdaq 100, a traditional proxy for tech-driven risk appetite, now shows a sharply negative 24-hour correlation with crypto at negative 0.77. This marks the most pronounced short-term divergence in months, suggesting that crypto traders are acting on distinct catalysts absent in broader equity markets.

Three interlocking forces drove this sell-off: a cascade of leveraged liquidations, coordinated whale exits in Ethereum, and macro-level caution despite apparent political resolution. The first, and perhaps most mechanically significant, was the unwinding of excessive leverage in futures markets. Over US$260 million in crypto positions were liquidated in just one day, with longs accounting for 84 per cent of Bitcoin and 90 per cent of Ethereum losses.

This follows a 10 per cent weekly increase in open interest, indicating that speculators had aggressively positioned for further upside. When prices dipped, even modestly, margin calls triggered a feedback loop of forced selling, amplifying the initial decline into a full-blown washout.

Compounding this technical pressure was a strategic retreat by institutional and whale participants in the Ethereum ecosystem. Data confirms that two large holders offloaded 178,080 ETH, valued at approximately US$528 million, in what appears to be a coordinated profit-taking manoeuvre. This move coincided with the worst weekly outflow period for Ethereum spot ETFs since their launch. US$796 million fled the nine US-listed funds over the prior week, with every single ETF posting net redemptions.

Such synchronised outflows suggest more than just retail sentiment fatigue. They reflect a loss of institutional conviction at current valuations. With Ethereum’s RSI hovering near 38, a level often deemed oversold, the asset lacks organic buying pressure to absorb such large-scale exits, leaving technical support at US$3,360 as the next critical threshold.

Meanwhile, the macroeconomic data released this week offers a mixed signal. On one hand, the ADP National Employment Report published on November 5 showed that private employers added 42,000 jobs in October, the first monthly gain since July. Annual pay growth held steady at 4.5 per cent, signalling persistent wage pressures. However, a separate weekly ADP metric covering the four weeks ending October 25 paints a bleaker picture.

Private-sector employers shed an average of 11,250 jobs per week during that window. This internal contradiction, monthly gains versus deteriorating weekly trends, fuels uncertainty about labour market resilience heading into year-end. With the Federal Reserve still data-dependent, such ambiguity keeps rate-cut expectations tentative, despite gold rising to US$4,118.58 per ounce on hopes of easing monetary policy.

The US Dollar Index edged down 0.13 per cent to 99.46, while Brent crude rose 1.72 per cent to US$65.16 per barrel, reflecting cautious optimism about global demand. Crypto failed to participate in this risk-on drift. Instead, it exhibited classic risk-off behaviour, not because of direct Fed commentary or CPI surprises, but due to internal market structure vulnerabilities, namely, too much leverage and too little institutional anchoring.

From a strategic standpoint, this correction may be healthy. The 2.99 per cent weekly gain preceding the drop had stretched technical indicators and elevated funding rates into unsustainable territory. The liquidation event serves as a necessary recalibration, clearing weak hands and resetting leverage ratios.

The simultaneous ETF outflows and whale selling in Ethereum suggest deeper concerns about the token’s near-term utility or valuation relative to Bitcoin. While Bitcoin continues to benefit from its digital gold narrative and ETF inflows, Ethereum faces scrutiny over scaling progress, staking yields, and its role in a potential Web4 stack that increasingly integrates AI and decentralised finance in novel ways.

Looking ahead, all eyes turn to two pivotal levels. Bitcoin’s psychological and technical floor sits at US$60,000, and Ethereum’s support rests at US$3,360. A break below either could trigger further algorithmic selling and sentiment deterioration.

Conversely, suppose the government funding bill passes the House and is signed into law, currently estimated at a 96 per cent probability by November 15. In that case, it may restore enough macro calm to reignite risk appetite. Crypto’s fate will ultimately depend less on political theatre and more on whether organic demand can replace speculative leverage and institutional outflows. Until then, volatility remains the only certainty.

 

Source: https://e27.co/crypto-crashes-3-7-per-cent-despite-us-shutdown-deal-us260m-liquidations-and-whale-exodus-trigger-sell-off-20251112/

 

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Why Bitcoin decoupled from Nasdaq and what it means for the US$112K breakout

Why Bitcoin decoupled from Nasdaq and what it means for the US$112K breakout

The global macro environment entered a pivotal inflexion point this week as political momentum gathered behind a bipartisan Senate effort to end the longest government shutdown in US history. After 42 days without full federal operations, lawmakers cleared a critical procedural hurdle late Sunday, setting the stage for a potential return to normalcy. President Donald Trump signalled his support for the compromise on Monday, catalysing a broad-based rally across risk assets.

US equity markets responded with conviction, as the Nasdaq soared by 2.27 per cent, the S&P 500 climbed 1.54 per cent, and even the more conservative Dow Jones Industrial Average advanced by 0.81 per cent. The relief extended to fixed income markets, where the yield on the 10-year Treasury note edged up by two basis points to 4.11 per cent, reflecting diminished safe-haven demand and renewed confidence in fiscal stability.

While equity and bond markets absorbed the news through classic risk-on behaviour, the cryptocurrency market exhibited a more nuanced reaction. Over the last 24 hours, the total crypto market cap rose 0.74 per cent, building on a 1.89 per cent weekly gain despite the lingering shadow of macro uncertainty. This resilience stemmed not from blind optimism, but from a confluence of three distinct catalysts that spoke directly to longstanding structural challenges within the digital asset ecosystem: regulatory clarity, DeFi tokenomics innovation, and Bitcoin’s evolving relationship with macro liquidity conditions.

The first driver emerged from Capitol Hill, where a bipartisan Senate proposal gained traction to transfer primary regulatory authority over digital assets from the Securities and Exchange Commission to the Commodity Futures Trading Commission. This legislative manoeuvre directly addresses a core grievance within the crypto industry: the SEC’s enforcement-first posture, which many developers, investors, and entrepreneurs view as hostile to innovation. By designating most digital tokens as commodities rather than securities, the bill would place them under the CFTC’s more predictable, principles-based framework.

The market interpreted this shift as a potential inflexion point for institutional adoption. Companies like Coinbase, which have long operated under the threat of SEC litigation, saw their equities rise alongside major tokens such as Ethereum, whose classification has been a source of legal ambiguity. The proposal’s success hinges on maintaining bipartisan support in a fractured Congress, but its mere introduction has already recalibrated market sentiment toward a more constructive outlook on US regulatory policy.

Simultaneously, DeFi sentiment received a powerful jolt from Uniswap, the leading decentralised exchange by volume. The Uniswap Labs team and the Uniswap Foundation introduced a comprehensive restructuring plan dubbed UNIfication, which proposes activating a long-dormant protocol fee switch and implementing a systematic token burn mechanism. Central to the plan is a one-time retroactive burn of 100 million UNI tokens, equivalent to 16 per cent of the total supply, alongside ongoing burns funded by a share of trading and Unichain fees. This directly tackles a foundational criticism of the UNI token: its lack of clear utility and inflationary pressure due to vesting schedules. By redirecting protocol revenue to token holders through buybacks and burns, the proposal aligns incentives across users, liquidity providers, and long-term stakeholders.

The market response was immediate and emphatic, with UNI surging 38 per cent and catalysing broad-based gains across the DeFi sector, including 12 per cent for AAVE and 22 per cent for CAKE. Derivatives volume for DeFi tokens spiked 133 per cent week-over-week, signalling renewed speculative and hedging interest. The ultimate test will come via on-chain governance, where token holders must approve the proposal. A rejection could trigger sharp profit-taking, but the very act of proposing such a bold realignment has reignited optimism about DeFi’s capacity for self-improvement and value accrual.

Meanwhile, Bitcoin reclaimed the US$106,000 level, drawing support from both macro relief and technical dynamics. The resolution of the government shutdown removes a near-term liquidity overhang that had likely suppressed institutional flows into spot Bitcoin ETFs. With federal operations expected to resume, market participants anticipate a resumption of ETF inflows, which have totalled US$7.8 billion in the third quarter of 2025 alone. The rally also exhibits signs of fragility. Open interest in Bitcoin futures declined by 6.3 per cent, suggesting that leveraged long positions remain cautious.

More intriguingly, the 24-hour correlation between Bitcoin and the Nasdaq turned slightly negative at negative 0.12, indicating a subtle decoupling from traditional tech equities. This hints at Bitcoin’s evolving narrative, not merely as a risky tech proxy, but as a distinct macro asset influenced by its own supply dynamics, institutional demand, and on-chain activity. Technical analysts now eye the US$112,000 resistance level, where a decisive breakout could unleash more than US$two billion in long liquidations, potentially accelerating the move higher.

Despite these bullish undercurrents, the broader sentiment remains restrained. The Fear and Greed Index sits at 31, deep in fear territory, and Bitcoin dominance declined by 0.1 per cent on the day, suggesting that capital rotation into altcoins remains tentative. This fragility underscores the market’s awareness that political and protocol-level promises must still translate into concrete outcomes.

The Senate bill transferring oversight to the CFTC faces a long legislative road, and the Uniswap governance vote could fracture consensus. Moreover, the Federal Reserve’s path on interest rates remains uncertain, with soft US economic data lifting gold to US$4,090.96 per ounce and reinforcing expectations of future rate cuts, yet Treasury yields still edged higher on shutdown resolution hopes.

In summary, today’s market gains reflect a delicate balance between hope and caution. Regulatory optimism surrounding the CFTC proposal, DeFi innovation via Uniswap’s tokenomics overhaul, and macro relief from the impending end of the government shutdown have combined to lift asset prices. The sustainability of this rally, particularly of altcoin momentum, will depend on whether these catalysts materialise into real-world changes.

Traders now watch two critical events: the outcome of UNI’s on-chain governance vote and the political trajectory of the bipartisan CFTC bill. Their success or failure will determine whether this week’s optimism evolves into a durable bull phase or fades as another false dawn in crypto’s volatile lifecycle.

 
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From shutdown to surge: How macro relief is lifting crypto and equities

From shutdown to surge: How macro relief is lifting crypto and equities

Equity markets hover at critical technical junctures while macroeconomic headwinds, particularly the spectre of a prolonged US government shutdown, have only just begun to recede. Cryptocurrency markets, deeply intertwined with broader risk sentiment, have rebounded modestly, buoyed by improved macro conditions and renewed institutional interest in Layer 1 infrastructure. Beneath the surface, divergences in both traditional and digital asset markets suggest that the current calm may be temporary and highly contingent on incoming data, policy developments, and capital flows that remain in flux.

Equity markets continue to tread carefully around key technical support levels. The S&P 500, a bellwether for global investor sentiment, finds itself sandwiched between its 50-day and 100-day moving averages, zones that often act as fulcrums between continuation and reversal. Although recent price action has been subdued, the possibility of a year-end rally persists, especially given the surprisingly strong third-quarter earnings results that delivered a 15 per cent year-over-year profit growth across the index. This strength is increasingly concentrated and increasingly fragile.

The so-called Magnificent 7, once a monolithic engine of market returns, now exhibit stark performance divergence. Tesla, emblematic of this fragmentation, encapsulates the broader uncertainty. Analyst forecasts span from bullish projections of a 6x price surge to bearish scenarios anticipating steep corrections. Such volatility in outlook underscores a market increasingly sceptical of uniform growth assumptions and more attuned to company-specific fundamentals, execution risk, and macro dependencies.

This skepticism is well-founded. While optimism around artificial intelligence remains intact, particularly in the context of long-term structural transformation, the near-term outlook for capital expenditure shows signs of potential deceleration. The year 2026 may witness a slowdown in AI-related capex, especially in downstream sectors where valuations appear stretched relative to near-term revenue visibility.

Compounding this risk is the fact that many of the Magnificent 7 remain deeply tethered to consumer behavior, whether through digital advertising, cloud services, or hardware sales. Should broader economic conditions falter, driven by persistent inflation, tighter credit conditions, or geopolitical shocks, their vaunted cash flow strength could erode faster than anticipated. Investors would be wise to adopt a selective approach, distinguishing between companies with resilient business models and those riding speculative momentum.

Currency markets add another layer of complexity. The US Dollar Index (DXY), which had been testing the psychologically significant 100 level, pulled back slightly to 99.60 following news of a Senate resolution to end the 40-day government shutdown. The dollar remains strong, and positioning appears crowded. Such crowding increases the risk of sharp reversals should upcoming macro data or, more likely, signals from the Federal Reserve shift market expectations. A stronger dollar typically acts as a headwind for US multinational earnings and emerging market assets alike, and its influence on capital flows cannot be overstated. In the context of crypto, where dollar strength often inversely correlates with asset prices, this dynamic remains a critical variable.

Global themes further complicate the narrative. China’s strategic push into humanoid robotics, exemplified by XPENG’s IRON project, signals a broader ambition to dominate next-generation industrial and consumer technologies. Simultaneously, Chinese companies are accelerating overseas expansion, challenging incumbents in markets from Southeast Asia to Latin America. India, by contrast, has underperformed relative to both China and Japan, raising questions about its near-term growth inflexion and policy responsiveness. In such an environment, a barbell strategy, combining exposure to large-cap growth leaders with defensively positioned, dividend-paying equities, offers a prudent approach to navigating regional and sectoral divergences.

The macro backdrop improved meaningfully over the weekend with the Senate’s bipartisan agreement to end the government shutdown, the longest in US history. This resolution directly addresses a significant source of liquidity drain. Since October 10, approximately US$700 billion in economic activity has been disrupted or delayed, constraining both consumer and institutional risk appetite. With the shutdown concluded, capital can begin to reallocate toward risk assets, a dynamic already reflected in the 4.83 per cent 24-hour gain in crypto markets following a 3.94 per cent weekly loss. Bitcoin’s 0.70 seven-day correlation with the S&P 500 underscores how tightly crypto remains linked to traditional market sentiment. Relief in one arena quickly transmits to the other.

Layer 1 ecosystems have emerged as a focal point of this renewed optimism. Solana’s 4.42 per cent sector gain was catalysed by Western Union’s announcement that it will launch a US dollar stablecoin exclusively on Solana in the first quarter of 2026. This is not a speculative foray but a strategic institutional endorsement of Solana’s scalability and throughput.

Similarly, Ethereum received a significant vote of confidence through EigenCloud’s US$200 million deployment of ETH-based infrastructure to support AI systems. These developments indicate that blockchain is no longer merely a speculative playground but an operational backbone for real-world financial and technological infrastructure. Institutional adoption of this magnitude validates the long-term utility of high-performance Layer 1 networks and draws capital toward ecosystems demonstrating clear use cases and execution capability.

Technically, the crypto market rebounded from oversold territory, with the 14-day RSI at 37.4 signalling exhaustion among sellers. Bitcoin retested its 50-week moving average near the US$103,000 level, a zone that often acts as a magnet for price action. Spot trading volume rose 14 per cent to US$159 billion, while derivatives open interest climbed 5.76 per cent, suggesting that traders are cautiously re-engaging.

This optimism remains tempered. Ethereum ETFs recorded US$466 million in outflows on November 7 alone, highlighting persistent institutional scepticism toward ETH despite its technological advancements. Moreover, the market must sustain a close above the seven-day simple moving average at US$3.46 trillion in total market cap to confirm bullish momentum. Failure to do so could trigger a retest of the US$3.37 trillion Fibonacci support level.

Gold’s rise to US$4,007 per ounce amid dollar softening and shutdown-related uncertainty further illustrates the fragile nature of current sentiment. Safe-haven demand remains elevated, even as risk assets rally. This duality, bullish price action coexisting with defensive positioning, is a hallmark of late-cycle or transitional market regimes.

Whether Bitcoin can hold above US$105,000 in this environment depends not only on technicals but on broader macro confirmation. Sustained liquidity normalisation, stable dollar conditions, and continued institutional validation of blockchain infrastructure must all align. Until those pillars solidify, the relief rally, while welcome, should be approached with disciplined risk management and selective exposure.

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