Crypto market deepens correction

Market Picture

The cryptocurrency market is under pressure, losing about 4.6% in 24 hours to $3.2 trillion by the start of active trading in Europe. These are five-day lows, with the crypto market driven by a sell-off in safe havens such as Bitcoin and Gold in hopes of deescalating tensions between Lebanon and Israel. Separately, Trump's tariff threats are playing against stock indices and weighing on equities.

The Cryptocurrency Fear and Greed Index fell to 79. That is still extreme greed, but the index's lowest level in two weeks.

Bitcoin fell below $93K on Tuesday morning, deepening its corrective pullback and falling for the fourth consecutive day. On Monday, there was a renewed attempt to take the price above $99K, which turned into more selling. This is due to the geopolitical pullback, which has turned into a broader profit-taking scenario, looking at the entire rally since November 4th. This means that traders should pay more attention to BTC's momentum around $91.8K (76.4% of the rally). Without proper support in this area, the bears' next target could be the $87K area (61.8%).

News Background

According to CoinShares, global crypto fund investments rose to an all-time high of $3.124 billion last week, following inflows of $2.193 billion the week before. Investments in Bitcoin rose by $3.078 billion, Ethereum by $3 million, Solana by $16 million, and XRP by $15 million. Investments in funds that allow shorting bitcoin increased by $10 million.

FalconX noted that the relative dominance of bullish orders in the bitcoin market has weakened, and the growth momentum is not supported by new buying interest. It warned that minor negative news could lead to a noticeable correction in BTC.

According to CryptoQuant calculations, unrealised gains in Bitcoin have reached 57%, signalling an increased likelihood of a correction. This was preceded by a jump in daily realised gains to a record $443 million.

Despite bitcoin's rapid rally, the likelihood of a flash crash in the cryptocurrency is higher than ever, according to Michael van de Poppe, founder of MN Trading. He noted classic signs of overheating in Crypto as the volume of margin positions and the overall volatility increased.

On November 25th, MicroStrategy founder Michael Saylor announced the purchase of an additional 55,500 BTCs at a price of ~$97,862. The company now controls 386,700 BTC at an average price of $56,761.

The SEC set a new financial record for fines on crypto companies last fiscal year (ended September 30th) with $8.2 billion, more than half of which ($4.47 billion) came from a settlement with Terraform Labs (TFL).

By the FxPro Analyst Team