We will also look at the main reasons behind BTC’s 25% decline since October, according to analysts.
However, the Kobeissi Letter’s analysts believe that a deeper and fundamental shift is taking place in the cryptocurrency market, and explained why a new kind of ‘structural’ bear cycle has begun.
Why such big movements?
Before we get into the explanation of these types of bear markets, let’s first examine the analysts’ culpability for the overall market disaster. After all, BTC has lost 25% since its all-time high in early October, and is now at a six-month low of $95,000 after Sunday’s dip. As they admitted, this decline is particularly “strange for one important reason.”
“There have not been many material bearish developments on the fundamental side of crypto. A few days ago, President Trump said that America as “number one in crypto” is his top priority.”
Moreover, inflation in the US is gradually decreasing, the Federal Reserve has cut interest rates again and Washington and Beijing are close to a trade deal. As a result, the landscape now looks a lot more bullish than, for example, in April.
Consequently, the analysts categorized the current downturn as ‘structural and mechanical’. They noted that this started with institutional outflows in mid to late October, which is evident in the ETF numbers. In the first week of November, crypto-focused funds experienced a record net outflow of $1.2 billion.
Where things get particularly tricky in crypto, however, is in the excessive levels of leverage used during these institutional outflows, the Kobeissi Letter explains.
As a result, when these sudden downturns happen in crypto, liquidations rise.
As we saw on October 10, the -$19.2 billion liquidation wave led to the first ever daily BTC candlestick of $20,000.
Excessive levels of leverage have resulted in a seemingly oversensitive market. pic.twitter.com/oJtnYQNQTm
— The Kobeissi Letter (@KobeissiLetter) November 16, 2025
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What’s next?
The release added that on three of the past 16 trading days, liquidations skyrocketed above $1 billion. Additionally, the analysts noted that daily liquidations of more than $500 million have become a daily occurrence. As such, they indicated that when this is combined with ‘lean’ volume, price swings in either direction become violent.
This also explains the huge shift in market sentiment. As reported this weekend, the Fear and Greed Index has fallen to its lowest level since February, even as BTC has risen 25% since the April bottom.
“The leverage effect amplifies shifts in investor sentiment,” the analysts said.
Nevertheless, the team concluded that the fundamental value of the cryptocurrency market has only improved. They predicted that the bottom is near because these ripples will “work their way out.”
If you really zoom out, it looks like crypto is in a “structural” bear market.
The fundamental value of crypto has only improved, but the market dynamics are changing.
As with any efficient market, the ripples will work themselves out.
We think the bottom is near. pic.twitter.com/ra2QaFwoHy
— The Kobeissi Letter (@KobeissiLetter) November 16, 2025
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