Bitcoin has fallen below $90,000, its lowest price in seven months, amid growing anxiety across the cryptocurrency market.
Economist Tracy Schuchart explains that the crash was actually a series of interconnected system failures occurring simultaneously.
There are no strong buyers at current levels, as financial institutions are becoming more risk-averse and the retail industry is also concerned.
Today, the crypto market is bleeding as Bitcoin falls below $90,000 for the first time in seven months. Fear is rapidly rising, with the Crypto Fear and Greed Index currently at 11, with over $1 billion in liquidations recorded in the past 24 hours.
The sharp decline in the market has everyone speculating – what is causing the crash?
Tracy Shuchart, Senior Economist at NinjaTrader Live, explains how Bitcoin’s decline is a system-wide failure involving multiple factors.
Why did the drop occur?
Bitcoin skyrocketed from $40,000 to $126,000 in less than a year based on a particular narrative of Fed easing and institutional investment via ETFs fueling a sustained bull market. This has increased futures open interest by $94 billion and offers leverage as high as 1,001:1 on some platforms.
She points out that this setting alone shows that the system was dangerously stretched.
The real damage started when markets quickly overruled Fed expectations. The market had priced in a 90% probability of a December interest rate cut, but the real yield on short-term government bonds is now just 40%, while it remains above 5%. And this is how the whole macro story supporting Bitcoin at $126,000 collapsed.
ETF hit
Once seen as a gateway to institutional capital, the ETF infrastructure created an unprecedented amount of short liquidity. This resulted in a $1.1 billion outflow from the ETF within days.
Meanwhile, a long-term holder who bought between $40,000 and $80,000 saw the upcoming volatility and wanted to lock in a 50-150% profit, so he started selling 815,000 BTC in 30 days.
The situation then worsened in a cascading manner as Bitcoin broke through the $100,000 support level, triggering technical stops across the derivatives market. More than $20 billion in leveraged positions were liquidated between October and November. Each liquidation added selling pressure, creating a feedback loop. Open interest has fallen from $94 billion to $68 billion, but she notes there is still leverage that needs to be cleared.
There are no real buyers yet
Economists say everyone is missing important insights at the moment. There are no buyers at these price levels, with institutional investors avoiding risk, long-term holders waiting for the bottom, and retail investors becoming cautious.
Markets need to fall enough to deleverage, encourage long-term holders to accumulate, and attract buyers of real capital who are willing to tolerate volatility. She points out that the $600 billion disappeared was mostly unrealized paper gains that evaporated.
Essentially, Bitcoin’s rise from $40,000 to $126,000 increased its market cap by $1.7 trillion, but this was driven by a macro narrative that turned out to be false.
reality check
But now the market is re-accepting the reality of high yields, no Fed easing, and a strong dollar.
She calls this “textbook deleveraging” in highly leveraged markets where there is no cash flow to lock in value. This sharp decline reflects accumulated leverage rather than changes in Bitcoin’s long-term value.
The real question now is at what price Bitcoin will stabilize and attract genuine buyers.
focus on the basics
Despite the difficult market environment, some analysts remain hopeful. Analyst Michael van de Poppe points out that the biggest disconnect is between the current price and the growth of cryptocurrencies’ underlying fundamentals.
Yes, this is a terrible market environment.
Yes, it feels like $BTC will be $25,000.
Yes, it feels like #Altcoins are completely gone.
No, I am not selling my portfolio and am continuing to be patient.
This is the biggest disparity between domestic asset prices I have ever seen…
— Michael van de Poppe (@CryptoMichNL) November 17, 2025
However, he points out that while similar levels have occurred during major market crashes, history shows that such periods are temporary and patience is rewarded.
Binance CEO Richard Teng also reminded investors that volatility is part of the journey and the best defense is a clear strategy, patience, and diligent research. “Focus on fundamentals, not short-term noise. ” he said.
