Many investors are questioning the rapid shift in market conditions. After a period of green screens just weeks ago, the entire market has suddenly flipped. The central question on everyone's mind is simple: Why is Bitcoin crashing again, and why is the crypto market following so aggressively?
This trend feels familiar to anyone who has experienced previous market cycles. The climb appears steady until something breaks. Many traders felt that the rally had extended too long without a significant correction. The drop below $90,000 served as a stark reminder of how emotionally driven this market can be.
Bitcoin Price Weakness Sends Shockwaves Across Major Tokens
Bitcoin is the primary driver of all major moves in the cryptocurrency space, meaning weakness in BTC inevitably impacts the rest of the market. The decline over the past 7 weeks has been sharp, with the price falling approximately 30 percent and returning below $90,000 for the first time in months. The overall chart sentiment transformed from confident strength to visible stress within a short timeframe.
Large-cap cryptocurrencies reacted almost immediately. The fall in Bitcoin dragged down many popular tokens that typically mirror Bitcoin's movements. The pressure stemmed from several factors, and analysts have been vocal about their theories regarding the trigger for the selloff. Crypto Patel highlighted the scale of the market wipeout across both traditional markets and digital assets.
BREAKING: Massive Market Wipeout
— Crypto Patel (@CryptoPatel) November 21, 2025
Over $1 trillion has been erased from the US stock market in a single day, signaling one of the sharpest sell-offs in recent months.
Meanwhile, the crypto market saw over $120 billion vanish from its total market cap, reflecting heightened… pic.twitter.com/GlbT8ArxNs
The drop erased more than $1 trillion from the US stock market in a single day. Concurrently, the crypto market lost over $120 billion within the same period. Crypto Patel described this event as a reminder of how quickly liquidity and sentiment can collapse when global risk appetite weakens.
This type of environment tends to expose the fragility of tokens with weaker underlying narratives. Only a few niche areas of the market have managed to remain in positive territory despite the turbulence.
Analysts Point to Funding Dynamics, Liquidity Stress, and Fading Momentum
Several analysts have attempted to dissect the reasons behind Bitcoin's sharp downturn. Jacob King presented one of the most direct explanations, arguing that the explosive move from $15,000 to $126,000 was propelled by three primary forces. His view emphasizes Tether minting, retail FOMO (Fear Of Missing Out), and an exaggerated confidence in institutional demand.
His warning focused on the consequences when these drivers begin to decelerate. Jacob King stated that as Tether reduced its printing of new tokens, retail demand weakened, and the perception of widespread institutional accumulation became more difficult to sustain. He concluded that Bitcoin became extremely vulnerable without consistent inflows to support the upward trend.
Bitcoin pumped from $15,000 to $126,000 for 3 main reasons:
— Jacob King (@JacobKinge) November 20, 2025
1. Tether, the largest fraud on planet earth, pumped out billions of fake USDT daily and funneled it into Bitcoin and altcoins to enrich insiders.
2. That synthetic demand surge triggered retail FOMO and pulled in…
While this commentary may appear controversial, it reflects a growing concern among traders. Many feel that the rally was heavily reliant on liquidity engines rather than genuine fundamental adoption. This created a fragile structure that was prone to rapid unraveling once momentum stalled.
The Kobeissi Letter approached the crash from a macroeconomic perspective. Their analysis linked the sudden market drop to an unexpected announcement from the US Labor Department concerning upcoming employment data. The Kobeissi Letter noted that the S&P 500 was already experiencing a decline before the announcement, but the crash accelerated sharply afterward. The analysis pointed out that markets tend to react negatively when information becomes limited ahead of significant Federal Reserve decisions. The blackout of employment data created uncertainty that amplified every sell order.
This explanation aligns with a long-standing view in both the cryptocurrency and equity markets. Sentiment becomes highly sensitive during periods when traders feel uncertain about incoming data. The Kobeissi Letter explained that modern markets exhibit extreme swings because capital flows respond to minor headlines with disproportionately large reactions. Investors are on edge, making even simple triggers capable of escalating into multi-trillion dollar movements.
WHY are markets crashing? Our logical explanation:
— The Kobeissi Letter (@KobeissiLetter) November 20, 2025
There is quite literally only ONE headline that can even be partially blamed for such a sudden market crash.
At 11:20 AM ET, the US Labor Department said the November and October employment "situation" will be released on… pic.twitter.com/zubNQstd5l
Broader Crypto Market Feels the Impact of Liquidity Outflows
Bitcoin's sharp decline triggered a chain reaction throughout the entire market. Liquidity drained from major altcoins as traders rushed to secure profits or cut positions to prevent deeper losses. The effect was immediate across top tokens that often depend on Bitcoin's stability for their directional cues. Projects lacking strong catalysts experienced some of their steepest price drops in months.
The selloff also exposed a more profound issue. Many investors entered the market during the excitement surrounding artificial intelligence, tokenized assets, and global adoption narratives. These themes had sustained the market through the earlier part of the year. The recent downturn has compelled many traders to re-evaluate the sustainability of the rally at its previous pace. This shift has created hesitation that has permeated exchanges and on-chain activity.
Several tokens with clear utility or strong community engagement managed to resist the worst of the fall. Their stability was primarily derived from consistent user activity rather than speculative hype. These few exceptions highlighted the contrast between projects with steady fundamentals and those that are dependent on broader market momentum.
Macro Uncertainty Keeps Pressure on Bitcoin and the Entire Crypto Market
The current market drop is not attributable to a single cause. It is the result of a combination of liquidity stress, macroeconomic uncertainty, fading momentum, and shifting sentiment. Bitcoin remains the primary driver of activity in the digital asset landscape, meaning any weakness at the top inevitably spreads throughout the market.
The Kobeissi Letter aptly described the situation. The market has become so polarized that any headline has the potential to ignite a cascade of trillions of dollars. Many traders recognize that this is not an environment conducive to sustained confidence. The cryptocurrency market thrives on clarity, yet recent announcements have created the opposite. The fear of another unexpected data release or interest rate shift continues to influence investor behavior.
The question many readers are asking is whether this crash signals a long-term reversal or a significant reset before the next phase of the market cycle. The answer hinges on how quickly liquidity returns and whether key macroeconomic events become supportive again.
The one certainty in the crypto market is that changes occur faster than most anticipate. The drop below $90,000 demonstrates how rapidly conditions can shift, even after months of sustained strength.