Finance

Bitcoin Plunges Below $100K: How Macroeconomic Storms Triggered a $2 Billion Crypto Liquidation

Crypto market plunged, with $2B in liquidations as Bitcoin hit a 6-month low.

November 4, 2025, 10:32 PM

A golden physical Bitcoin coin stands on a dark surface in front of a digital screen showing a red, sharply declining financial candlestick chart.

Golden coins with the Bitcoin logo drop as the leader cryptocurrency faces a pullback in a bear market. By DUSAN ZIDAR / Shutterstock.com.

Executive Summary

The cryptocurrency market experienced significant turmoil, with total liquidations surpassing $2 billion as Bitcoin briefly fell below $100,000 and Ethereum plunged to a four-month low.

Bitcoin dipped below $100,000 for the first time in six months, trading around $101,167 after a 5% daily decline, while Ethereum dropped to a four-month low of $3,097 with $655 million in liquidations.

The market downturn was exacerbated by factors including the U.S. government shutdown, broader macroeconomic uncertainty, aggressive long-position trading, and President Trump’s ongoing trade conflicts.

The Story So Far

The recent cryptocurrency market turmoil, which saw Bitcoin briefly drop below $100,000 and widespread liquidations, was primarily driven by macroeconomic headwinds, including a U.S. government shutdown that significantly reduced market liquidity and broader uncertainty exacerbated by President Trump’s ongoing trade conflicts. This downturn was further intensified by aggressive long-position trading, where many investors used borrowed money to bet on price increases, making the market highly susceptible to sharp corrections.

Why This Matters

The recent crypto market turmoil, characterized by over $2 billion in liquidations and Bitcoin’s brief dip below $100,000, underscores the asset class’s significant vulnerability to broader macroeconomic and political events, including the U.S. government shutdown and President Trump’s trade conflicts. This widespread downturn serves as a critical test of market resilience, potentially acting as a “healthy reset” if key price levels are maintained, or signaling a “deeper drop” if investor sentiment continues to be impacted by ongoing economic uncertainty.

Who Thinks What?

Analysts attributed the accelerated crypto market decline partly to the U.S. government shutdown siphoning funds from asset markets, President Trump’s ongoing trade conflicts, and growing skepticism regarding a potential 2025 U.S. interest rate cut.

Maja Vujinovic, co-founder and CEO of FG Nexus, commented that the downturn was due to too many traders using borrowed money for long positions, suggesting it could be a “healthy reset” if Bitcoin holds above $100,000-$105,000, or a “deeper drop” otherwise.

Mike Maloney, CEO of Incyt, noted the event was an “echo of Black Friday (October 10),” indicating that anxiety persists among large investors despite quick reversals.

The cryptocurrency market experienced significant turmoil on Tuesday, with total liquidations surpassing $2 billion as Bitcoin briefly fell below $100,000 for the first time in six months and Ethereum plunged to a four-month low. This widespread downturn was exacerbated by a combination of factors, including the U.S. government shutdown, broader macroeconomic uncertainty, and aggressive long-position trading.

Bitcoin’s Price Action

Bitcoin’s price dipped as low as $99,075 on CoinGecko and just under $99,000 on CoinMarketCap. The leading cryptocurrency was recently trading around $101,167, marking an approximate 5% daily decline and over 10% for the week. This puts Bitcoin nearly 20% down from its all-time high of over $126,000 set in early October.

Ethereum Hits Four-Month Low

Ethereum also saw a sharp correction, dropping from a 24-hour high of $3,649 to a four-month low of $3,097. At a recent price of $3,260, ETH was down more than 9% on the day, outpacing other top-ten cryptocurrencies in daily losses. Ethereum positions accounted for $655 million in liquidations, slightly exceeding Bitcoin’s $614 million.

Market-Wide Liquidations

Across the crypto market, approximately $2.02 billion worth of positions were liquidated within 24 hours, with $1.63 billion specifically from long positions betting on price increases. While substantial, this figure remains below the record $19 billion in liquidations witnessed in October, suggesting some traders may have adopted more conservative strategies since then.

Macroeconomic Headwinds and Expert Commentary

Analysts told Decrypt that the accelerated decline was partly due to the U.S. government shutdown, which increased the Treasury’s General Account (TGA) to $1 trillion. This move effectively siphoned an estimated $700 billion from asset markets, including crypto, and pushed overnight repo usage to record highs.

Maja Vujinovic, co-founder and CEO of digital assets at Ethereum treasury firm FG Nexus, commented that “too many traders were using borrowed money to bet on prices going up.” She suggested that if Bitcoin can maintain a price above $100,000-$105,000 in the coming days, the event might be a “healthy reset”; otherwise, a “deeper drop” could occur. Mike Maloney, CEO of Incyt, noted the event was an “echo of Black Friday (October 10),” with anxiety persisting among large investors despite a quick reversal.

The crypto correction coincided with a broader downturn in traditional financial markets, as the Nasdaq and S&P 500 indices closed lower, impacting tech stocks. Other contributing factors to recent crypto losses include President Trump’s ongoing trade conflicts, particularly a threat against China that preceded October’s record liquidations, along with general liquidity concerns and growing skepticism regarding a potential third U.S. interest rate cut in 2025.

Key Takeaways

The recent market volatility underscores the interconnectedness of crypto with broader economic and political events. Investors are advised to monitor Bitcoin’s price stability above key psychological levels and observe macroeconomic indicators for signs of market recovery or further turbulence.