Table of Contents
TL;DR,
- A massive crypto liquidation wave wiped out $2 billion in just 24 hours, affecting over 391,000 traders and causing a single whale’s profit to shrink by nearly $10 million.
- While retail traders faced margin calls, early whales like Owen Gunden exited massive positions, creating selling pressure that pushed Bitcoin to six-month lows despite rising institutional ETF ownership.
- Options data and market sentiment point to a bearish season, with analysts predicting Bitcoin could test lows near $75,000 before volatility stabilizes and a potential rebound occurs.
Bitcoin dipped; it flatlined just when we all thought adoption, ETF outflows, and an African Bitcoin treasury would point to BTC going to $150K, $180K, or $200K; the market took a nosedive to below $85,000.
While the outcomes for treasury companies, individual traders, and company ETF listings are noteworthy, a single whale trader incurred a loss of $7.5 million. Optimists believed that Bitcoin would continue to rise, while realists expected it to maintain a steady flow; however, the market had different plans.
So, why the sudden drop? What was once hailed as the largest ROI investment now reminds us that at its core volatility is its true nature.
The November crypto liquidation wave, by the numbers
This particular story started off with a single whale trader who had accumulated an impressive $14.9 million gain before the market reminded the entire industry why volatility is linked with cryptocurrency.
Bitcoin’s price collapsed below key support levels, forcing liquidation mechanisms to activate automatically and dissolving the entire leveraged position. A profit of $14 million shrank to just $4.07 million. For context, that’s KES 1.295 billion/₦14.65 billion/R173.255 million, gone in a matter of hours.
The rest quickly followed, marking this scenario as one of the fastest reversals in recent crypto history. In 24 hours, the entire world witnessed a staggering $2 billion in total crypto liquidations. The bitcoin price crash affected 391,164 traders, which was quickly followed by long positions accounting for $1.78 billion and BTC facilitating merely $960 million. These are all losses, a crypto liquidation spiral that humbled evangelists who only got high off a bullish season.
The aftermath: Bitcoin back in its former 2024 glory days of $85,000.
Let’s establish a boundary to comprehend the stark reality. In October, the market saw over $19 billion in crypto positions liquidated within 24 hours, resulting in approximately 1.6 million traders experiencing total wipeouts. We carefully analyzed and demonstrated the causes of a liquidation cascade; however, there was some damage control as BTC maintained a value of $102,000.
This month presents a distinct scenario, leading many to question whether we will ever return to our $100K threshold.
Is the bitcoin price crash a capitulation or a reset?
When everyone was spreading the buy narrative, long-term holders were cashing out. Since mid-October, Owen Gunden, described as one of the first and wealthiest bitcoin holders, unloaded all BTC holdings, selling 11,000 bitcoins worth $1.3 billion.
Gunden’s final transfer of 2,499 Bitcoin worth $228 million to the Kraken exchange marked the complete exit of a millionaire whose involvement with the digital asset dated back to 2011.
Coincidence? I THINK NOT!
The market is basically a game of “I dare you,” especially between whales, institutions, and small-time traders. Owen threw down the gauntlet, and the market psychology spiraled, contributing to the selling pressure that pushed Bitcoin to six-month lows.
On November 20, CoinGlass reported more than $910 million in position liquidations across exchanges, forcing 222,008 traders out of their holdings in a single day. It was a clear chain reaction. Minor price breaks trigger a chain of margin calls that amplify selling, which then leads to more margin calls.
It’s a feedback loop; cascading crypto liquidity keeps pressure on KPIs and news flash headlines like “Bitcoin fell below its 50-day and 200-day moving averages, prompting trend-following investors to step back.”
It worked; it’s still working, with recent prints showing a 4.2% decline to $86,681.41 and a seven-month low, leaving the market down more than 7% year-to-date.
What do Bitcoin ETF outflows say about institutions?
Now the question might be, what of institutes? Institutional ownership of U.S. spot bitcoin ETFs rose to about 40%, up from 27% in Q2 2024—evidence that large players have been accumulating via ETFs even as other shareholders begin to drive net outflows.
However, the net Bitcoin ETF outflows tell a different story with unusually high exits. Yet, rising institutional stakes suggest some see current levels as accumulation zones rather than exit points.
That tug-of-war helps explain why price still feels heavy despite selective demand—especially when breaks like Bitcoin price below $85,000 can quickly reignite forced deleveraging. The next leg likely hinges on whether institutional bids can overpower retail capitulation even as Bitcoin ETF outflows show other holders exiting.
Hedges, puts, and the options dashboard
The bitcoin price crash made it all clear; bearish season is finally here, and various option markets back this up. Derive.xyz placed a 50% chance that Bitcoin would finish the year below $90,000, while the odds of ending 2025 above $100,000 sit at 30%.
Sean Farrell, head of digital asset strategy at Fundstrat, noted that “near-term risk/reward now looks more balanced,” suggesting that oversold conditions after Bitcoin hit seven-month lows below $90,000 could attract value-oriented buyers.
Sean Dawson, head of research at Derive.xyz in Canberra, also tallied $8.25 billion in combined long and short liquidations over the last 30 days, while the 30‑day call-put skew slid to -5.3% from -2.9%. Implied volatility rose, with the 30‑day jumping from 41% to 49% and the 180‑day increasing to 49% from 46%. He warned the “powderkeg” in tech valuations could see Bitcoin price below $85,000 and even as low as $75,000 before a quick rebound.
The crypto liquidation was the start, and the numbers back it up. Derive flagged about 13,800 option contracts at $85,000 for the December 26 expiry. In summary, if the crypto liquidation persists, it will result in increased profits. However, the narrative is not one-sided; there remains hope (if any) for a positive outcome.
However, the recent bitcoin price crash has served as a reminder to the entire industry that volatility is the deciding factor, even as institutional accumulation and options hedges compete for market dominance.
