What’s causing the crypto sell-off, who is losing, and will it last?
Global stocks rose on Thursday after strong Nvidia results eased concerns of a market crash, linked to the perceived overvaluation of AI firms.
Bitcoin, the world’s most established cryptocurrency, also enjoyed a modest lift — rising 0.73% by early afternoon in Europe.
This comes after a hard few months for the token. On Monday it briefly slipped below the $90,000 mark for the first time in seven months before rising to around $91,800 on Thursday.
A turning point in crypto’s trajectory can be traced back to 10 October, when a meltdown wiped out more than $1 trillion in market value across all tokens. More than $19 billion of leveraged crypto positions were offloaded, notably after US President Donald Trump threatened new tariffs on China.
“There have been several catalysts (of the recent price drop), but it seems as if the biggest drivers are long-term selling by ‘OGs’, an uncertain economic climate, and a mass deleveraging event on the 10th October,” Nic Puckrin, CEO of Coin Bureau, told Euronews.
“OGs are the term used to describe older Bitcoin holders with massive amounts of Bitcoin. They have been selling for several weeks which has led to a flood of supply hitting the market,” he added.
Analysts note that the US economy is in a period of deep uncertainty at the moment, partly as a government shutdown has prevented the publication of key data releases, with the uncertainty driving crypto lower.
The outcome of the Federal Reserve’s next interest rate decision, due in December, is hanging in the balance — with investors now paring back expectations of a cut.
Transcripts released this week from the Fed’s October meeting show the policy-setting committee deeply divided over whether to reduce the benchmark interest rate.
“Bitcoin is increasingly driven by macro moves,” Puckrin argued.
Analysts fear that as crypto grows more interconnected with mainstream financial markets, contagion will make both crypto assets and stock markets more volatile.
‘A football match with no referee’
Bitcoin reached its price high in October thanks to increased institutional acceptance, expectations of Fed rate cuts, and support from the Trump administration.
For Carol Alexander, crypto expert and finance professor at Sussex University, Bitcoin’s volatility must nonetheless be associated with aggressive trading techniques — rather than simply pointing to the macro environment.
“Bitcoin’s price is determined primarily by the behaviour of professional traders operating on offshore, unregulated trading platforms. These are not hobbyist investors; they are major hedge funds and specialised trading firms,” she told Euronews.
“On these offshore crypto exchanges, professional traders can deploy aggressive order-book strategies — sometimes labelled spoofing or laddering … Their business model relies on generating sharp volatility. They do not care whether the price rises or falls; they care only that it moves quickly.”
In other words, these traders make money from price swings by buying in the dip and selling when crypto rebounds, meaning they aren’t focused on long-term holdings.
The losers in this scenario are often non-professional traders, who can sometimes take on enormous leverage — borrowing money to increase the size of their investments. When the market moves against these investors, they are often forced to sell, losing everything.
“When too many of these non-professional traders have been wiped out, liquidity dries up, and the pros step back,” said Alexander. “At that point, the price often rebounds sharply, encouraging new entrants to join. The whole system behaves like a football match played in a stadium with no referee.”
Puckrin also predicted that crypto is set for a rebound, forecasting that it won’t fall much below current levels.
“I still think it’s a bright future despite the price action. Crypto has been through multiple cycles and it always emerges stronger. We are also seeing the mainstreaming and institutionalisation of the industry. This means more people can use the technology in their daily lives.”