Bitcoin Updates: Collapse of Crypto Market Makers Sparks 8-Day Wave of Fear Amid Deepening Liquidity Crunch

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Bitcoin Updates: Collapse of Crypto Market Makers Sparks 8-Day Wave of Fear Amid Deepening Liquidity Crunch

Bitget-RWA2025/11/24 00:58

By:Bitget-RWA

- Crypto Fear & Greed Index hit 19 for 8 days, signaling extreme panic amid $420M ETF outflows and liquidity crises. - Market makers collapsed due to stablecoin mispricing, wiping 2M accounts and amplifying volatility since October. - Malaysia cracks down on $1B-loss crypto mining , while Bitfury shifts $1B to tech amid plunging mining profits. - Trump family lost $1.3B in crypto assets, including Bitcoin mining and memecoins, despite claiming volatility as opportunity. - Experts predict 6-8 week stabiliza

The Crypto Fear & Greed Index, widely regarded as a crucial indicator of investor mood,

reached 19

on November 19, 2025, marking its eighth straight day in the "Extreme Fear" zone—the longest such stretch in more than three years. Even with this minor rebound from recent lows, the index highlights a market overwhelmed by anxiety, as participants prepare for ongoing turbulence amid widespread liquidations, tighter regulations, and unsuccessful institutional investments. Spanning from 0 (peak fear) to 100 (peak greed), the index has often pointed to buying opportunities during periods of extreme fear, but the current environment is exceptionally bleak.

This extended period of fear is the result of several converging challenges. Since October, U.S. spot crypto ETFs have seen net outflows exceeding $420.8 million, with

Bitcoin

ETFs accounting for the majority of losses (-$372.8M).

Solana

, on the other hand, has bucked the trend,

continuing to attract net inflows

as institutional investors shift toward smaller-cap assets. At the same time, market makers have been severely impacted by a liquidity crunch since mid-October.

A mispricing event involving stablecoins led to automatic deleveraging

across trading platforms, resulting in nearly 2 million accounts being wiped out and causing heightened price volatility. "CRYPTO DIDN'T BREAK-MARKET MAKERS DID," commented Tom Lee,

emphasizing that the sector's underlying vulnerabilities have intensified the downturn

Bitcoin Updates: Collapse of Crypto Market Makers Sparks 8-Day Wave of Fear Amid Deepening Liquidity Crunch image 0

Regulatory and operational challenges are making the situation worse. In Malaysia, authorities are cracking down on illegal crypto mining after estimating that such activities have cost the national grid $1 billion.

The nation's energy minister cautioned that unauthorized mining

is putting pressure on infrastructure, leading to enforcement actions that may affect the broader crypto landscape in Southeast Asia. Likewise, Bitfury, a trailblazer in Bitcoin mining,

revealed a $1 billion fund for technology investments

, indicating a strategic shift away from mining as profits dwindle.

Major losses among prominent players further highlight the market's instability. The Trump family's crypto-related businesses have seen their value drop by over $1.3 billion since September, with their Bitcoin holdings, memecoins, and mining interests all suffering. Donald Trump Jr. and Eric Trump's mining company,

American Bitcoin

lost $330 million in value

, while their

memecoin

has declined 25% since August. "Those who buy during downturns and accept volatility will ultimately prevail," Eric Trump claimed, though some analysts believe

the family's diverse income sources

—including token sales and related businesses—protect them from the losses faced by everyday investors.

Past trends indicate that once liquidity returns, the market could recover quickly. The current setup, with spot ETFs and institutional infrastructure, is much more robust than during the 2022 collapse. Analysts

predict it may take six to eight weeks

for conditions to stabilize, after which buying activity could pick up again. For now, though, the fear index serves as a stark alert. As one expert observed, "The system is intact, but the suffering is real—and this is just the beginning."

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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