Bitcoin crashes 22% in November 2025. Here are 3 reasons why it's falling?

Bitcoin crashes 22% in November 2025. Here are 3 reasons why it's falling?

Bitcoin crashed about 21% in November 2025 due to a mix of macroeconomic pressures, market structure stress, and sudden market shocks. Here is an in-depth article explaining the key reasons behind the decline:

1. Macroeconomic and Institutional Impact

Bitcoin's crash occurred amid rising uncertainty about the Federal Reserve's interest rate policies and a broader economic slowdown. Unlike earlier crypto corrections driven primarily by retail investors, this downturn reflects deep institutional involvement and regulatory scrutiny. Mainstream capital inflows, seen via spot Bitcoin funds approved by U.S. regulators last year, brought in cautious investors who treat Bitcoin more like a speculative financial asset than an ideology-driven crypto investment. This shift has increased its sensitivity to broader economic signals like interest rates and risk appetite. Falling risk appetite due to inflation fears and delayed Fed rate cuts led to widespread selling pressure in crypto markets.​

2. Flash Crash and Forced Liquidations

A sudden market shock on October 10, triggered by renewed US-China trade tensions, led to panic selling and a "flash crash" in crypto. This event wiped out $19 billion in value in a single day and caused forced liquidations for highly leveraged crypto traders. When Bitcoin prices fall below critical support levels, margin calls force investors to sell assets, accelerating the price drop in a cascading effect. This mechanical liquidation cycle amplified Bitcoin's plunge in November.​

3. Market Structure Weakness and Liquidity Drought

The crypto market experienced a sharp decline in liquidity and market depth as large holders, market makers, and arbitrageurs reduced exposure amid volatility and regulatory concerns. Miner capitulation—selling reserves amid unprofitable mining conditions—added to supply-side selling. The combination of weaker liquidity, reduced market-making activities, and a fragile trading environment caused Bitcoin prices to swing violently and stay under pressure in November.​

The month of November marks one of the toughest periods for Bitcoin since the 2022 downturn, with a near 30% slide from the October peak of $126,000. While some recovery was seen, uncertainties remain high, especially around regulatory risks, Federal Reserve policies, and global economic trends.​

This phase illustrates Bitcoin's evolving market dynamics as it shifts from retail-driven hype to a more institutionally integrated but volatility-prone asset.