Why Is Crypto Crashing Today and Will it Recover or Fall Further?

Why Is Crypto Crashing Today: Major Reasons and What Next for Market

Have you noticed the crypto charts flashing red again? Many traders are asking — why is crypto crashing today? In the last 24 hours, the global cryptocurrency market cap fell 2.1%, now standing at $3.46 trillion. The total trading volume has surged to $295 billion, signaling panic-driven activity.

Bitcoin and Ethereum Lead the Market Downturn

The market’s leading coins are facing their sharpest correction in weeks. Bitcoin (BTC) dipped 2.24% in a day, trading at $101,358.55 with a $2.02 trillion market cap. Over the past week, Bitcoin plunged nearly 10%, dropping from $113,110 to $99,008.89, triggering a wave of liquidations across exchanges.

Source: CoinMarketCap

Similarly, Ethereum (ETH) has faced an even steeper decline. At the time of writing, ETH is priced at $3,275.93, marking a 5.9% drop in 24 hours and a 17% crash over the week — sliding from $4,000.3 to $3,098. The sharp Ethereum price crash has raised concerns over altcoin resilience amid global uncertainty.

Political Tensions and Shutdown Deepen Market Fear

One of the main macro factors behind why crypto is crashing today lies in the ongoing U.S. government shutdown, which has now reached day 35 — the longest in U.S. history. Since October 1, the government has borrowed nearly $600 billion, averaging $17 billion daily, raising fears of fiscal instability and liquidity tightening.

Adding to the pressure, trade tariff talks between the U.S. and Switzerland have intensified. The 39% tariff on Swiss goods is under review, creating fresh tension in global markets. Investors view these developments as risk-off signals, pulling funds from volatile assets like cryptocurrencies.

DeFi Hacks Wipe Out $129 Million in 48 Hours

Another shockwave came from decentralized finance. Within 48 hours, Balancer and Moonwell — two major DeFi protocols — collectively lost $129 million due to oracle and access control vulnerabilities.

• Balancer suffered a $128 million breach on November 3.

• Moonwell followed with a $1 million loss on November 4.

These incidents exposed deep flaws in multi-chain infrastructure, shaking confidence in decentralized protocols and prompting massive withdrawals from DeFi platforms.

Whales Buy the Dip: A Glimmer of Hope

Despite the bloodbath, whales are showing confidence. A renowned trader known as “0x9263” on Hyperliquid closed all short positions and flipped long on BTC, ETH, SOL, and UNI, making $23.7 million in profit from 20 successful trades since October 1.

Meanwhile, the Anti-CZ Whale has reversed positions — moving long on 32,802 ETH (worth $109M) and shorting 58.27M Aster, 1.99B kPEPE, while holding a long on 130,566 DOGE ($21.5K).

Source: X

This whale activity indicates that smart money is betting on a rebound, possibly signaling that the market correction could be nearing its end.

What’s Next for Crypto Investors?

The ongoing U.S. government shutdown, global trade tensions, and recent DeFi breaches have undoubtedly rattled markets. However, institutional accumulation and whale activity suggest cautious optimism. If Bitcoin reclaims the $106,500–$112,000 zone and Ethereum bounces above $3,800, a recovery phase could soon follow.

Conclusion

The answer to why crypto is crashing today lies in a perfect storm — macroeconomic instability, DeFi vulnerabilities, and investor fear. Yet, with whales flipping long and fundamentals intact, this correction might just be a temporary storm before the next crypto rally takes flight.

Disclaimer: This article is for informational purposes only, not to be considered as financial advice. Do your own research before investing.