What happened?
Risk appetite fell in early November and crypto dropped quickly, triggering over $2 billion in liquidations and dragging market value down to roughly $3.45 trillion. Bitcoin slid below $100,000 and Ethereum fell under $3,100 as long positions were forced out and resting bids proved scarce. Market makers pulled back, spreads widened, and funding and basis moved toward neutral or negative as leverage came out of the system.
Who does this affect?
Leveraged traders and funds with long positions were hit first by margin calls and cascading sells. Market makers and liquidity providers tightened sizes and reduced inventory, making it harder for anyone to trade without moving prices. Retail and institutional spot holders also felt it because thinner books and simultaneous equity selling amplified price swings.
Why does this matter?
Reduced liquidity and tighter dealer inventories raise the odds of sharp price gaps and longer sell-offs during stress periods, which worsens volatility. With funding and basis drifting neutral or negative, sustainable rallies will need fresh cash rather than mechanical squeezes, so rebounds may be short-lived unless on-chain and cash indicators improve. If dollar and rate pressure ease and stablecoin issuance turns positive, liquidity should rebuild—if not, markets stay fragile and prone to quick reversals.