Crypto Market Sees Major Decoupling From US Equities and Gold After Losing $1.1 Trillion

Crypto market liquidations of over $500 million have become a daily affair recently amid continuous selling pressure despite a surge in US equities and Gold. This seems to be an isolated crypto sell-off, with the market losing a staggering $1.1 trillion over the past 40 days. Investors remained concerned about whether this major decoupling is the beginning of a broader bear market.

Crypto Market Faces Structural Downturn Losing $1.1 Trillion

The cryptocurrency market has lost more than $1.1 trillion in value over the past 41 days, averaging a daily decline of $27 billion. Total market capitalization now sits around 10% below levels recorded during the record $19 billion liquidation on October 10. This clearly flashes signs of a broader structural pullback, noted analysts at The Kobeissi Letter.

Despite the sharp decline, analysts note major negative fundamental developments do not drive the downturn. Earlier this week, U.S. President Donald Trump reiterated that making America “number one in crypto” remains a top national priority.

Despite this, Bitcoin has fallen 25% over the past month, erasing all of its gains for 2025. This highlights a clear disconnect between policy signals and market performance.

The crypto market data indicate that the downturn is more mechanical than sentiment-driven. It began with sustained institutional outflows kickstarting in mid-to-late October.

In the first week of November alone, crypto investment products, i.e., Bitcoin ETFs, recorded $1.2 billion in net outflows. Analysts warn that excessive leverage during a period of institutional withdrawal has amplified the sell-off.

Crypto Market Leverage Flushout In Play

Amid the sudden downswing in the crypto market, multi-billion-dollar liquidation events are becoming a common occurrence. Excessive leverage has continued to dominate the market dynamics, with recent trading conditions mirroring the volatility seen during the $19.2 billion liquidation event on October 10.

Market data shows that the crypto ecosystem has become increasingly sensitive to leveraged positioning. Over the past 16 days, there have been three separate sessions with more than $1 billion in liquidations. At the same time, daily wipeouts exceeding $500 million have become routine.

Amid these times of thin market liquidity, this leverage-driven environment has led to sharp, rapid price swings in both directions.

These conditions have also intensified sentiment shifts. The Crypto Fear & Greed Index has dropped to 10, signaling “Extreme Fear”. Analysts note that leverage is magnifying both downside moves and investor psychology, accelerating the market’s transitions between fear and optimism.

Experts Cite Bitcoin’s Underperformance With Gold

Market data shows a widening divergence between Bitcoin and gold following $19 billion liquidation event on October 10. For more than a year, the two assets moved with a strong positive correlation. However, since early October, Gold has outperformed Bitcoin by a staggering 25%.

On the other hand, the crypto market sell-off is happening in isolation. Despite crypto erasing more than $100 billion in market value since Friday, U.S. stock market futures opened in positive territory. At the same time, gold opened above $4,100 per ounce, while bond yields continue to rise. Commenting on this development, Bitcoin critic Peter Schiff wrote:

In early Asian trading, gold is already back above $4,100 while Bitcoin is struggling to hold $93,000. Bitcoin is now down 26% from its high. But in terms of gold, the bear market is far more ferocious, with Bitcoin down 39%. Sell Bitcoin now and buy gold before you get mauled.

Analysts say the disconnect reinforces signs that the current crypto correction is driven primarily by leverage and forced liquidations. According to market observers, a sustainable bottom is likely to form only once market structure stabilizes.