What Caused Bitcoin and Altcoin to Drop Dramatically on November 14?

On November 14th, global financial markets went mostly red as both US equities and cryptocurrencies fell sharply, extending only a few weeks of strong gains. The total cryptocurrency market capitalization went down by more than 2% to $3.35 trillion - the lowest point of the quarter.

Bitcoin was the main focus as it lost the $100,000 level for the first time in 188 days. This is a major psychological threshold that reflects increasing caution in the face of inconsistent macroeconomic indicators. Investors who had become used to six-figure Bitcoin prices are worried that this support level breaking will make them abandon their positions.

Moreover, Ethereum declined by almost 6% to less than $3,200 and a large portion of altcoins followed suit. More than $750 million of positions were liquidated in just half a day with 87% of those being long positions which means that this turnaround was both unexpected and overpowering.

According to one market analyst, "Such a liquidation cascade in sync of this kind indicates that the majority of traders were totally unprepared." He also added, "The reversal's timing is very indicative of heavy leverage being used in the recent rally."

The fall performance of cryptocurrencies was complemented by that of stocks. In the US, the stock markets of Big Tech saw their shares decline, thus causing a loss of about $1.1 trillion in market capitalization during just one trading day. The selling pressure seemed to expand from equities to cryptocurrencies with a chain reaction that led to risk repricing across all markets.

After having been over $110 billion removed from crypto market value, the sector is now playing the defensive game, which is typical after a period of sustained enthusiasm. Thus, investors are left wondering whether this is just a healthy correction or the start of a more significant trend reversal.