Here's why Bitcoin recovered after plunge to $100k and $610M market wipe
Bitcoin dropped to $100,800 on November 12, a 4.2% decline in 24 hours, before recovering to $103,000. The broader crypto market lost $65 billion, with $610 million in liquidated leveraged positions. The sell-off occurred amid a stronger dollar ahead of the US CPI release and fading odds of a December Federal Reserve rate cut. Derivatives markets amplified the decline due to leverage unwinds, with thin liquidity exacerbating volatility. Ethereum underperformed Bitcoin, trading at $3,246.40, while other altcoins like Solana, BNB, Cardano, Dogecoin, and XRP also fell. Spot Bitcoin ETFs recorded $524 million in net inflows, while Ethereum saw $107 million in outflows, reflecting cautious sentiment. Market conditions remain defensive and vulnerable to rapid reversals until CPI data clarifies the Fed's policy direction.
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Bitcoin's Price Drop and Market Impact
Bitcoin fell to $100,800 on November 12, down 4.2% in 24 hours, before recovering early in the morning to $103,000. The broader crypto market shed roughly $65 billion, resulting in over $610 million in liquidations of leveraged positions, according to Coinglass data. The sell-off was most intense during US trading hours, erasing overnight gains and dragging major altcoins lower across the board.
Impact of Macro Conditions
The US dollar strengthened ahead of the November 13 US consumer price index release following five consecutive days of correction. This dynamic typically pressures non-yielding assets such as Bitcoin. Additionally, the odds of a Federal Reserve rate cut in December have diminished, removing a key tailwind that had supported risk assets through October. As of press time, Polymarket’s odds of the Fed performing a 25-basis-point interest rate cut stood at 71%, a decline from 90% in late October. Traders now await inflation data that could clarify the Federal Reserve's policy path, adding further pressure to crypto positioning.
Leverage Unwinds and Price Volatility
The derivatives market amplified the decline. A liquidation cascade followed a pattern established during October, where thin liquidity triggered quick moves and clustered stop-losses caused outsized price drops when activated. After weeks of choppy trading and gradual leverage rebuilds, market positioning left the crypto market vulnerable to a sell-off. For instance, Ethereum was trading at $3,246.40, up just 0.25% in the past 24 hours, but underperforming Bitcoin. Other major cryptocurrencies also saw declines: Solana fell 1% to $153.21, BNB dropped 0.6% to $952.12, Cardano declined 1.6% to $0.5476, and both Dogecoin and XRP lost 2%, trading at $0.1686 and $2.34, respectively.
Spot ETF Flows and Altcoin Sentiment
Spot Bitcoin ETFs saw net inflows of $524 million on November 11, according to Farside Investors data, rebounding from prior sessions and offering temporary support to the market. In contrast, Ethereum funds posted $107 million in net outflows, leaving investor sentiment around ETH fragile and contributing to its underperformance against Bitcoin. The divergence in flows between Bitcoin and Ethereum added pressure on major altcoins, with broader market sentiment remaining cautious as traders adopted a defensive approach.