What Crashed the Crypto Market on November 4 and Should You Be Worried?

The total crypto market cap fell by more than $400 billion in just a few days. But what’s behind it?

What followed, however, was a market-wide crash that pushed BTC to just under $99,000 for the first time in almost five months. ETH turned negative YTD and fell to $3,200. And these declines occurred less than a week after the U.S. Federal Reserve cut interest rates, the U.S. and China made significant progress on trade deals, and inflation rates in the United States were not as high as many feared.

So why did the cryptocurrency crash, and why did its market cap fall to $3.2 trillion, erasing $1 trillion since its all-time high on October 6? Here is the version of the Kobeissi letter.

Why, Crypto, why?

The analysts noted that the big answer to this question is ‘more technical than fundamental’. They believe that some of the key metrics for the sector, such as adoption levels, deregulation and advancing technology, remain very high, which should encourage investors to enter the market and not push them away.

However, they warned again that debt levels are at “unprecedented levels, amplifying moves in the market such as the $20 billion liquidation on October 10.”

“As a result, when uncertainty arises or technical momentum fades, downside swings are amplified. On average, 300,000 traders are being liquidated PER DAY, and the market has evolved into its most reactive form in history amid Trump reports and headlines.”

As a result, the analysts warned that the short-term price picture points to “larger swings in both directions” due to the excessive leverage used by futures traders, but noted that the long-term thesis is “stronger than ever.”

One of those days

Crypto’s crash was not an isolated incident as most financial markets fell on Monday and Tuesday. Of course their losses, even the 4.5% reject of the Japanese stock market, are not nearly as damaging as the disaster of crypto, but that is mainly due to the aforementioned leverage and the size of the actual market.

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Consequently, the Kobeissi letter re-established that nothing fundamental had changed and added that such corrections are experienced periodically during bull runs. The analyst concluded that “rate cuts have happened, deregulation has arrived, earnings growth is 10%+ year-over-year, and the AI ​​revolution is accelerating,” and advised investors to “ignore the noise.”

Today is such a day:

Just about every asset class is trading lower today and all intra-day rally attempts are selling.

It is simply widespread profit taking.

In our view, nothing has fundamentally changed.

That said, the healthiest bull market experience…

— The Kobeissi Letter (@KobeissiLetter) November 4, 2025