NextFin news, on Monday, November 3, 2025, global cryptocurrency markets plunged as traders reacted swiftly to remarks from Federal Reserve Chair Jerome Powell who indicated that further interest rate cuts by the Fed were not guaranteed despite a 25 basis-point cut in October. This shift in the monetary policy outlook, conveyed in Washington D.C., sparked widespread sell-offs across major crypto assets with total market capitalization retreating 3.1% to $3.69 trillion, according to data reported by Binance.
The market reaction was severe with leveraged liquidations exceeding $395.7 million within a 24-hour window, predominantly hitting long positions valued at approximately $334.7 million. Bitcoin (BTC) declined sharply to $107,900 while Ethereum (ETH) fell to around $3,753. Altcoins also posted double-digit percentage losses, further emphasizing trader risk-off behavior. Over 162,000 individual traders faced liquidations as the price floor proved unstable amid cascading selling pressure.
Compounding the hawkish Fed narrative, Treasury Secretary Scott Bessent openly warned of recessionary pressures in sectors such as housing due to monetary tightening measures, injecting additional unease into financial markets. Institutional investors also signaled caution as U.S. spot Bitcoin ETFs saw estimated outflows of $1.15 billion last week, notably from large asset managers like BlackRock, ARK Invest, and Fidelity. This institutional pullback intensified selling momentum and diminished market confidence.
According to the CME FedWatch Tool, the probability of a December rate cut dropped sharply to approximately 69.3%, down from earlier expectations. Market participants now face heightened uncertainty ahead of the upcoming U.S. jobs report, which is expected to reveal slower hiring growth and steady unemployment rates—key indicators that will influence the Federal Reserve’s subsequent policy decisions.
The liquidation cascade was most pronounced in Ethereum, which absorbed $85.6 million in long liquidations, followed by Bitcoin with $74.6 million and Solana with $35 million. Analysts warn that if Bitcoin breaks below the $106,000 support level, an additional wave of roughly $6 billion in liquidations could ensue, extending the current correction phase.
Altcoins underperformed with the top 50 tokens collectively down nearly 4%, as reflected in price declines: Ethereum by 4.4%, Binance Coin (BNB) by 4.8%, XRP by 3.4%, Uniswap (UNI) by 9%, and Dogecoin (DOGE) by nearly 7%. Bitcoin dominance increased to 60.15%, signaling a rotation toward more stable assets amid increased volatility and risk aversion.
The recent sell-off also aligns with profit-taking activities following a brief market optimism sparked by a tentative U.S.–China trade agreement that had momentarily lifted total market caps to about $3.81 trillion. The Crypto Fear and Greed Index remained in the 'Fear' zone at 42, underscoring ongoing cautious market sentiment despite transient rallies.
This market correction marks Bitcoin’s worst monthly performance for October since 2018, with a 3.7% decline indicating persistent bearish pressures. As traders reduce leveraged exposure and institutional flows retreat, the crypto market is poised for continued volatility until greater macroeconomic clarity emerges.
Looking forward, the interplay between Fed monetary policy signals and critical U.S. economic data releases will serve as primary catalysts influencing crypto market direction. A hawkish Fed stance combined with potential weaker economic metrics could further suppress risk appetite, leading to additional liquidation events and price volatility. Conversely, any clear signs of economic stabilization or dovish Fed pivots might restore confidence and attract renewed institutional participation, positively impacting market valuations.
In conclusion, the intricate dynamics between macroeconomic policy, institutional investor behavior, and trader leverage underscore the heightened sensitivity of crypto markets to external economic signals in 2025. Market participants should remain vigilant, employing robust risk management strategies as the crypto ecosystem navigates through this period of elevated uncertainty and structural realignment.
Explore more exclusive insights at nextfin.ai.
