The shakeouts continue without mercy.
Every time someone calls for a relief rally, we get another sharp sell-off.
Unless you are privy to insider information, timing the bottom is a fool's game, and many leveraged traders are getting wiped out trying to do it.
Crypto Carnage
The Bitcoin price has fallen from $125k to $100k in less than a month. Meanwhile, ETH has crashed from $4700 to $3200 since the beginning of October.
Despite lower interest rates and the upcoming end of Quantitative Tightening (QT), we are still very much still in the trenches.
It makes you wonder, are the money changers manipulating markets on purpose in order to demoralize us, or are investors selling off their assets because they need cash to pay bills?
Retail Being Squeezed
Bankruptcy rates are skyrocketing as fewer businesses and individuals can afford to pay interest on their loans.
Why are rates so high?
In order to tame inflation, the Fed jacked rates from 0 to ~5% from 2022 to 2023, and this has been causing a strain on borrowers.
Despite higher interest rates, food, rent, and electricity prices continue to surge, and the average American is struggling to pay their bills.
This could be part of the reason why crypto assets are being sold off, as retail investors need cash to survive in this harsh economy.
TradFi Bursting At The Seams
Banks appear to be on thin ice as well.
Since September, The Fed's Standing Repo Facility has been lending an increasing amount of cash to banks and primary dealers.
This is a sign that we may be fast approaching another liquidity crisis, which would force the Fed to not only stop QT as planned, but to start up QE again, something we've been expecting for years.
To Print Or Not To Print
If the central banks don't continue to lower interest rates and inject liquidity into the system, the bankruptcies will accelerate, and the economy will get worse (despite them telling you it's great).
Zooming out, could this be part of the "you will own nothing and be happy" plan?
After all, who claims the properties of the individuals and businesses who go bankrupt? Why, the bankers who printed the loan out of thin air in the first place!
That said, with ongoing interest rate cuts and the end of QT in December, it would seem the money printer is indeed warming up.
However, who knows what kind of Black Swan event could interrupt the trajectory of massive liquidity injections, and require some kind of a "solution".
Strong Crypto Fundamentals
Despite the recent market carnage, crypto fundamentals continue to strengthen.
For example, aggregate DEX volume reached a new all-time high of $613 billion in October.
Meanwhile, resilient and dedicated communities continue to work long-hours behind the scenes on various privacy, DePIN, and DeFi projects.
The vast majority of memecoins are likely toast, but serious projects are setting themselves up for massive success in the near future.
Until next time...
2025 has been an unexpectedly rough year.
However, those who were around throughout the bear markets of 2012, 2015 and 2019 know that capitulation always sets in before cryptocurrencies recover spectacularly.
Although this particular bear market has lasted longer than the previous ones, holding on through the "it's time to give up" emotions is critical for long-term success.
The only people left now are the true believers. Either we go down with the ship, or sail off towards a new crypto-powered economy. In any case, it's going to be an exciting journey.
If you found this article interesting, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.