Why is crypto market down today? (Nov. 3)

Crypto markets tanked on Monday, Nov. 3, after a wave of liquidations wiped out nearly $400 million in leveraged positions.

Summary

• The total crypto market cap fell over 3%  to $3.69 trillion
• $334.7 million in long liquidations led the market downturn.
• The Crypto Fear and Greed index still remains in the fear zone.

Global market capitalization slid 3.1% over the last 24 hours to $3.69 trillion. Bitcoin (BTC) dipped 2.3% to $107,901, while Ethereum (ETH) slid 3.7% to $3,753. XRP (XRP) and Solana (SOL) weren’t spared either, falling 2.7% and 4.9% respectively, with XRP now trading at $2.45 and SOL holding near $178.

Data from CoinGlass paints a clear picture of market stress that largely contributed to the market downturn seen today. Roughly $395.7 million in liquidations were recorded in the past 24 hours, with over 162k traders affected, with long positions accounting for $334.7 million of that total. Ethereum bore the brunt of the flush-out, seeing $85 million in forced closures, followed by Bitcoin at $74.6 million and Solana at $35 million.

Profit taking by investors

The latest decline came as investors took profits after the total crypto market briefly climbed to $3.81 trillion earlier today. The rally followed news of a trade deal between the U.S. and Chinese presidents and came after a drop to $3.72 trillion last Friday.

Such profit-taking after the recent pump likely occurred as markets continue to be taken aback by Federal Reserve chair Jerome Powell’s hawkish undertone at his speech following the 25-basis-point rate cut on Oct. 29.

Powell’s remarks left investors uncertain about how much more easing lies ahead. Data from Polymarket show that the odds of a 25bps rate cut in December have slipped to 67% at press time, down from earlier expectations.

U.S. Jobs data in focus

The crypto market also tanked as traders remained cautious as they positioned ahead of the U.S. jobs report due on Friday. Economists expect hiring to slow while unemployment remains close to recent levels.

The results will help show whether upcoming rate cuts signal confidence in a soft landing or growing concern that parts of the economy are starting to weaken.

The data will help clarify whether the Federal Reserve’s recent policy shift reflects confidence in a soft landing or a more reactive stance to signs of economic stress.

Until then, risk markets, including crypto, may remain choppy as traders await clarity on the path forward.

Bitcoin closed October negative

Investors also remain cautious as they move into November with a bearish tone. Notably, the Crypto Fear and Greed Index, which gauges overall market sentiment, held at a “Fear” score of 42 on Monday. 

While that marks a 5-point improvement since yesterday, likely boosted by the US-China trade deal, investors are likely wary about the market’s upcoming trajectory based on Bitcoin’s historical performance.

Bitcoin, the bellwether crypto asset, closed out this October with a disappointing 3.7% loss, its worst performance for the month since 2018. Traders were largely expecting the “Uptober” narrative to play out, but the weak monthly close has dampened confidence and could keep risk appetite subdued in the short term.

Bessent’s recession warning adds pressure

Treasury Secretary Scott Bessent’s comments over the weekend have also stoked fresh concerns about the broader economy.

In an interview with CNN, he said the Federal Reserve’s restrictive policy “may have driven parts of the economy, particularly housing, into recession,” and added that the central bank now has room to cut rates.

Crypto markets initially rallied on hopes that his remarks would support further easing. But those gains quickly faded as traders weighed the risk that any rate cuts could be a reaction to slowing growth, rather than proactive support.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.