Why Did Crypto Go Down This Week (03–09 November 2025)?

Cryptocurrency markets faced a sharp correction in the week of November 3–9, 2025, as Bitcoin, Ethereum, and major altcoins recorded losses of 3–4%. 

Analysts pointed to a mix of technical and macroeconomic factors behind the decline: a massive leverage unwind, renewed correlation with U.S. equities, and a wave of uncertainty in decentralized finance (DeFi). 

The result was a volatile week that reminded traders how interconnected digital assets have become with traditional markets and liquidity cycles.

1. Leverage Unwinding and Forced Liquidations

The initial wave of selling came from derivatives markets. Billions in leveraged long positions were liquidated across exchanges, particularly on Binance and OKX, as funding rates flipped negative. Open interest dropped sharply, signaling that traders were cutting exposure after weeks of speculative buildup.

This cascade effect triggered automated liquidations, pushing prices lower in a matter of hours. Analysts observed that thin liquidity and reduced market-making activity magnified the drop, while margin calls on smaller exchanges caused further volatility. 

This kind of “deleveraging spiral” often occurs when funding rates stay elevated for too long, followed by a sudden shift in sentiment.

Don’t miss out on Bitrue’s ongoing events and promotions. Earn bonuses and receive free crypto tokens just by participating.

2. Macro Pressure and Equity Correlation

The broader macro backdrop also worked against crypto markets. U.S. equity indices weakened during the same period after hawkish remarks from Federal Reserve officials dampened expectations for rate cuts in early 2026. 

The Nasdaq Composite fell nearly 2% mid-week, dragging Bitcoin’s short-term correlation with tech stocks back above 0.8.

As the dollar strengthened and Treasury yields ticked higher, risk assets saw outflows — and crypto, often treated as a high-risk asset class, felt the pressure. 

This return of macro correlation highlighted how investor behavior remains sensitive to traditional financial signals, especially in the absence of major crypto-specific catalysts.

Read Also: Federal Reserve Rate Cut Marks a Strategic Shift as Inflation Cools and Labour Market Softens

3. DeFi Security Incidents and Market Contagion

Adding to the tension were several DeFi exploits and security breaches reported during the same week. Losses across decentralized lending and yield platforms shook trader confidence and led to temporary withdrawals of liquidity from DeFi protocols.

Even though most losses were contained, the fear of contagion spread quickly on social media, pushing many investors to move assets into stablecoins or centralized exchanges. 

Historically, DeFi-related shocks amplify volatility across the broader crypto market, as they reduce on-chain liquidity and weaken sentiment among active traders.

Read Also: Crypto Halloween 2025: Memecoins That Surged Last Year and Could Rally Again

4. Technical Breaks and Shifting Sentiment

On the technical side, Bitcoin briefly fell below its 50-day moving average, triggering stop-loss orders and algorithmic selling. Ethereum and Solana mirrored the pattern, each testing critical support levels that had held through October.

Technical analysts noted that when multiple large-cap assets break below key moving averages simultaneously, it often accelerates downside momentum. 

The Relative Strength Index (RSI) across major coins dipped into oversold territory, suggesting a short-term bounce was possible — but traders remained cautious amid thin weekend liquidity.

Read Also: Is Pi Coin Bullish? These Analyses Think So

Conclusion

The selloff between November 3–9, 2025, was not caused by a single event but by a convergence of stress points: leverage unwinding, macroeconomic headwinds, DeFi instability, and technical breakdowns. 

Market observers see this as part of a natural cycle of correction following months of aggressive speculation.

For investors, the focus now turns to key indicators such as funding rates, futures open interest, and macroeconomic data releases. If these stabilize in the coming week, crypto markets could see a rebound — but for now, caution and tight risk management remain essential.

Join Bitrue today and explore a secure way to trade top digital assets while earning exclusive rewards and using powerful trading features.

FAQ

What was the main reason crypto prices dropped this week?

The primary cause was a massive liquidation of leveraged long positions, which triggered a chain reaction across spot and futures markets.

Did the Federal Reserve influence the market decline?

Yes. Hawkish comments from Fed officials and stronger U.S. dollar data contributed to a risk-off mood that affected both stocks and crypto assets.

Were DeFi hacks responsible for the crash?

DeFi losses didn’t start the selloff but made it worse by increasing fear among investors and reducing on-chain liquidity.

Will crypto recover soon?

Recovery depends on whether leverage has been flushed out of the system and if macro conditions stabilize. A sustained rebound will require renewed spot demand and improved sentiment.

What should traders monitor next?

Watch Bitcoin’s funding rates, total market open interest, and upcoming economic indicators like U.S. inflation data. These will determine whether the correction deepens or reverses.