Bitcoin Heading for Worst Month Since Crypto Collapse of 2022

(Bloomberg) — Bitcoin is on track for its worst monthly performance since a string of corporate collapses rocked the wider crypto sector in 2022.

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The largest cryptocurrency slid as much as 6.4% to $81,629 on Friday before paring losses, according to data compiled by Bloomberg. It was trading at $84,166 at 7:42 a.m. in London. Ether fell as much as 7.6% to below $2,700.

Bitcoin has now shed about 23% of its value in November, the most in a single month since June 2022, according to data compiled by Bloomberg. The implosion of Do Kwon’s TerraUSD stablecoin project in May of that year sparked a daisy chain of corporate failures that culminated in the downfall of Sam Bankman-Fried’s FTX exchange.

Despite a pro-crypto White House under US President Donald Trump and surging institutional adoption, Bitcoin has plummeted over 30% from its record high set in early October.

The rout follows a crippling bout of liquidations on Oct. 10 that wiped out $19 billion in leveraged token bets, and in turn erased roughly $1.5 trillion from the combined market value of all cryptocurrencies.

The selling pressure has only intensified in the past 24-hours, with a further $2 billion in leveraged positions liquidated, according to data from CoinGlass.

Institutions appear reluctant to “buy the dip.” A group of 12 US-listed Bitcoin exchange-traded funds saw $903 million in net outflows on Thursday, their second-largest single-day redemption since debuting in January 2024. Open interest in perpetual futures has fallen 35% from its October peak of $94 billion.

The broader market backdrop has done little to help. US stocks, which had rallied on renewed enthusiasm for artificial intelligence after upbeat earnings from Nvidia Corp., surrendered gains amid concerns over stretched valuations and doubts about a Federal Reserve rate cut in December.

“Sentiment across the board is incredibly poor. There appears to be a forced seller in the market and it is unclear how deep this goes,” said Pratik Kala, portfolio manager at Australia-based hedge fund Apollo Crypto.

Tony Sycamore, analyst at IG Australia, said in a note that the market “may also be seeking to test Strategy’s pain threshold” — a reference to the original Bitcoin hoarder run by Michael Saylor. That’s significant, as a further slide towards the company’s break even point would trigger margin calls on its leveraged holdings, he added. Strategy Inc. closed 5% lower on Thursday.