$500M exits crypto markets this week – Is a new bear cycle starting?
Key Takeaways
Is the crypto market formally in a bear cycle?
Whereas Bitcoin and TOTAL crypto market are beneath stress, capital continues to be searching progress spots, signaling a wholesome reset.
The place is investor capital flowing proper now?
Buyers are rotating into strong-performing belongings and on-chain RWAs, highlighting selective bullish conviction out there.
Is crypto formally in a bear market?
High caps are breaking help, $1.85 billion liquidated on the 4th of November, and worry’s at extremes. Altogether, these indicators level to capital leaving the area, with the TOTAL crypto market cap bleeding billions.
In brief, market momentum has turned bearish, with buyers de-risking throughout each spot and derivatives. And but, there are indicators this may simply be a “wholesome” reset, moderately than a full-blown crash.
Bear market thesis strengthens as crypto merchants de-risk
Bitcoin [BTC] breaking $100k reinforces a bearish setup.
Add the Altcoin Season Index sliding again to early-August ranges, and it’s wanting extra like a full-on bear cycle. Backing this up, TOTAL2 (ex-BTC market cap) is down 9% this week, shedding roughly $240 billion.
Mainly, capital isn’t flowing into “high-risk, high-reward” performs. As a substitute, merchants are enjoying it protected. That retains the bearish thesis alive, with round $470 billion exiting the crypto market this week.
Supply: TradingView (TOTAL)
Notably, the derivatives market can be displaying the identical pattern.
In lower than every week since November began, practically $4 billion has been wiped from the market, with roughly 77% coming from lengthy positions. Meaning round $3.08 billion was flushed out in lengthy squeezes.
Therefore, the crypto market is signaling sturdy bearish momentum.
Each spot and derivatives merchants are de-risking aggressively, altcoin rotation stays muted, and BTC has damaged a key flooring. So, on this surroundings, is betting quick on the crypto market the logical transfer?
Crypto market rebalancing as capital chases winners
flows, buyers are clearly chasing alternatives.
Zcash [ZEC] is main the cost, hitting back-to-back all-time highs and averaging a 30% weekly run over the previous three weeks. Bulls are regaining conviction in privateness tokens regardless of an overheated market.
Solana [SOL] isn’t lagging, both. Even with bearish stress, its ETFs are pulling in $45 million day by day on common, whereas BTC and Ethereum [ETH] ETFs preserve bleeding capital, displaying a transparent shift in investor portfolios.
Supply: Farside Buyers
In brief, these flows present the market continues to be removed from a full bear cycle.
Whereas capital isn’t rotating broadly into altcoins, buyers are chasing alternatives in newer, utility-driven performs, with ZEC and SOL main the cost. The Real World Assets (RWA) sector confirms this pattern.
The sector is up 6.8%, hitting $35.83 billion ATH. Meaning capital continues to be searching progress spots, even because the crypto market cools. On this context, the market’s nonetheless bullish, with buyers repositioning moderately than exiting.
