Risk-Off Sentiment Drives Crypto Downturn

Markets retreated Monday amid renewed macro uncertainty, with nearly every sector in the red, excluding bitcoin miners. The S&P 500 and Nasdaq 100 dipped 1% and 1.1%, respectively, pressured by tech sector weakness. Gold fell 1.4%, while bitcoin dropped 2.3%, now trading just above $90,000.

Risk aversion dominated trading, with L2 tokens and the Solana ecosystem experiencing the largest declines, hurt by broader DeFi deleveraging. Bitcoin miners were the only bright spot, gaining 1.0%. Crypto’s volatility was highlighted by a 13% drop in BTC over the past week, outpacing other asset classes.

Liquidity stress is evident in the widening spread between SOFR and EFFR, a sign of scarcity in overnight money markets. Broader economic themes remain tense, with anticipation building for Nvidia’s earnings release and the delayed September jobs report.

Bitcoin ETF outflows have reached $3 billion over the last three weeks, while ETH spot ETFs saw $1.2 billion in outflows. Solana ETFs attracted $650 million, boosted by new launches. Even previously strong performers like MicroStrategy are facing pressure, with their mNAV ratio falling below 1.0.

Corporate crypto treasury accumulation has slowed significantly in November. Miners are also struggling, with hashprice collapsing and network hashrate rising, despite falling BTC prices. However, increased volatility is driving network activity and fees higher.

A new cross-chain liquidity hub, Near Intents, has seen exponential growth, processing $2.19 billion in volume as of November 17, with a key catalyst being the integration with Zcash and the Zashi wallet. This growth suggests a potential shift towards broader adoption of permissionless swapping across blockchains.

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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.