The continuation of the sharp correction in the cryptocurrency market on November 20, 2025, resulted from macroeconomic pressure (concerns about Fed policy and a strong US labor market). However, analysis of institutional capital flows and regulatory changes (MiCA in the EU, deregulation in the USA) signal the long-term maturity and diversification of the sector.
Cryptocurrency Market Analysis for November 20, 2025
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Date 20 November 2025
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1.0 Sharp Market Correction in the Context of Macroeconomic Pressure
1.1 Section Introduction
The continuation of the sharp sell-off in the cryptocurrency market on November 20, 2025, represents a critical stress test for market maturity, exposing its increased sensitivity to traditional financial indicators. The scale of declines, driven by a cascade of liquidations, was a direct response to unfavorable macroeconomic signals, especially those concerning the monetary policy of the US Federal Reserve. A precise understanding of the depth of this correction and its causes is of strategic importance for assessing the stability of the entire sector.
1.2 Scale of Sell-off and Liquidation Cascade
Key numerical indicators illustrate the depth of the market correction and the level of panic among participants.
Key Asset Price Declines: Bitcoin (BTC) fell to around $86,600, reaching its lowest level in seven months. Ethereum (ETH) dropped below the $2,900 threshold, XRP fell to $2.00, and Solana (SOL) dropped to just over $130. The price action pushed Bitcoin below the key technical support of the short-term holders' cost basis, triggering a new wave of panic selling.
Massive Position Liquidations: Within 24 hours, positions totaling over $912 million were forcibly closed from the market. The vast majority were long positions, with liquidations totaling $704 million. The momentum of the decline was particularly evident within a single hour when $199 million worth of positions were liquidated.
Number of Affected Traders: The number of market participants whose positions were automatically closed exceeded 222 thousand.
Extreme Market Sentiment: The Crypto Fear and Greed Index reached a value of 11, which is interpreted as a signal of "extreme fear" among investors and reflects widespread capitulation.
1.3 Analysis of Macroeconomic Factors
Selling pressure in the crypto asset market was largely driven by two key macroeconomic factors originating from the United States:
Federal Reserve Policy: The minutes from the latest Fed meeting revealed significant internal disputes. The lack of consensus on future steps caused a sharp drop in market expectations for an interest rate cut in December – the probability of such a move fell to just 30%. The prospect of maintaining higher interest rates for longer negatively impacted the valuation of risky assets.
US Labor Market Data: Delayed employment data for September proved to be stronger than expected (creation of 119,000 new jobs). The solid labor market reinforced investors' belief that the Federal Reserve will not be under pressure to ease monetary policy anytime soon.
1.4 Transitional Sentence
Despite the prevailing bearish sentiment and panic in the retail market, analysis of institutional capital flows, particularly in the ETF market and in strategic corporate movements, reveals a more nuanced and complex picture of the situation.
2.0 Institutional Capital Flows: Divergence in the ETF Market and Strategic Corporate Movements
2.1 Section Introduction
Tracking capital flows in Exchange Traded Funds (ETFs) and analyzing the strategic decisions of leading companies are crucial for assessing the long-term prospects of the market. These indicators expose the fundamental divergence between short-term, sentiment-driven retail investor behavior and the long-term conviction of institutional capital.
2.2 Outflows from BTC and ETH ETF Funds
In recent weeks, ETF funds based on Bitcoin and Ethereum have experienced significant capital outflows, which were directly linked to rising macroeconomic uncertainty.
Bitcoin (BTC): A record single-day outflow of $523 million from BlackRock's IBIT was recorded. Total outflows from cryptocurrency funds amounted to $2 billion in recent weeks. These outflows are linked to macroeconomic uncertainty and expectations regarding monetary policy (according to James Butterfill of CoinShares). Arthur Hayes (BitMEX) suggests that the largest holders are using ETFs to execute basis trades, rather than for long-term exposure, which may generate selling pressure.
Ethereum (ETH): Outflows persisted, including the sale of $193.3 million in ETH by BlackRock on one day. This was the ninth consecutive day of outflows from spot ETH ETFs.
2.3 Increased Interest in Alternative ETFs: SOL and XRP
Newly launched funds for Solana and XRP are enjoying dynamic growth in interest, which contrasts with the situation in the market for BTC and ETH based ETFs.
Solana ETFs: In just three weeks since their launch, these funds recorded total inflows of $382.05 million.
XRP ETF: The spot XRP fund attracted $250 million on its first day of trading.
Assessment of the Phenomenon: These inflows signal a growing institutional appetite for diversifying exposure to Layer-1 platforms beyond Ethereum and for exploring assets with distinct regulatory narratives (such as XRP's post-litigation clarity).
2.4 Strategic Positioning of Institutions
Despite the current correction, key institutional players are making strategic moves that demonstrate long-term confidence in the sector's potential.
Kraken Exchange Expansion: The company raised $800 million in a new funding round, increasing its valuation to $20 billion. A key element is a strategic partnership with the financial market giant, Citadel Securities. This cooperation signals the construction of infrastructure aimed at bridging traditional capital markets with digital assets.
Support for MicroStrategy: Citi analysts issued a "Buy" recommendation for MicroStrategy stock, signaling confidence in the company's BTC-based strategy, even amidst high price volatility.
2.5 Transitional Sentence
The evolving regulatory frameworks in Europe and the United States constitute the most important, fundamental factor shaping the future strategic landscape for FinTech companies and investors.
3.0 Regulatory Landscape: Confrontation of European Standardization with American Deregulation
3.1 Section Introduction
We are currently observing a growing divergence between the approach of the European Union, aiming for comprehensive standardization, and the United States, where the new administration signals a shift towards deregulation.
3.2 European Union: MiCA as a Catalyst and AMLR as a Challenge
The European Union is introducing two key legislative acts:
MiCA – Passport to an Institutionalized Market: The Markets in Crypto-Assets Regulation (MiCA) introduces uniform and rigorous standards across the entire European Economic Area (EEA). 92% of investors in the EU declare feeling safer thanks to MiCA. Trading volume among EU clients increased by 70% quarter-on-quarter in Q1 2025. The largest exchanges are actively implementing strategies to obtain a Crypto Asset Service Provider (CASP) license.
AMLR – Threat to Privacy Cryptocurrencies: The Anti-Money Laundering Regulation (AMLR), scheduled to enter into force in 2027, prohibits licensed entities from handling anonymous cryptographic assets, explicitly mentioning technologies such as ring signatures.
Monero (XMR): Its mandatory and unconditional privacy is fundamentally incompatible with AMLR, leading to its systematic delisting from the largest exchanges in the EU.
Zcash (ZEC): Thanks to optional privacy and the innovative "viewing key" mechanism, Zcash possesses a potential pathway to achieve compliance with the new regulations.
3.3 United States: Change of Wind at the SEC
Under the new presidential administration, the US Securities and Exchange Commission (SEC) signals a fundamental change in approach to the sector.
Removal of Cryptocurrencies from Examination Priorities: The SEC removed cryptocurrencies for the first time in years from its list of annual examination priorities for 2026, which is viewed as a clear signal of reduced regulatory pressure.
New Regulatory Philosophy: The new SEC Chairman, Paul Atkins, declared a shift towards a more cooperative and pro-innovation approach.
Specific Deregulatory Actions: Accounting guidance SAB 121, which hindered banks from holding digital assets, was withdrawn. The creation of a "token taxonomy" was announced as part of the "Project Crypto" initiative.
3.4 Transitional Sentence
This complex and dynamic market and regulatory panorama leads to specific scenarios and strategic implications that must be carefully analyzed.
4.0 Market Scenarios and Strategic Implications for European Entities
4.1 Section Introduction
The goal of this section is to distill the analysis so far into concrete, future-oriented scenarios and practical implications for investors and FinTech companies.
4.2 Potential Scenarios for Key Assets
| Asset Category | Scenario A: Continuation of the Bearish Trend | Scenario B: Reversal and Growth |
|---|---|---|
| Bitcoin (BTC) | The market remains under macroeconomic pressure. Breaking key support levels ($88,600, and then $82,000) leads to a deeper correction, and the market enters a longer phase of "stability seeking" (Glassnode analysis). | A correction in global stock markets (around 10-20%) forces the US government and the Fed to intervene and increase dollar liquidity. According to Arthur Hayes' forecast, money printing causes a sharp rise in demand for scarce assets, and the price of BTC rises towards $200,000 - $250,000. |
| Privacy Cryptocurrencies | AMLR regulations in the EU lead to a market bifurcation. Zcash, due to optional privacy (the viewing key mechanism), gains the status of a regulation-compliant asset and becomes the preferred privacy tool for institutions. Monero is marginalized. | Regulatory authorities in the EU and G7 countries adopt a stricter stance. Both Zcash and Monero are subject to a de facto ban, and the entire privacy cryptocurrency sector loses access to liquidity in regulated markets. |
4.3 Implications for Institutional Investors
Prioritization of Regulatory Risk Assessment: Investors must rigorously evaluate investments in privacy cryptocurrencies, especially assets like Monero, which are associated with growing and unavoidable regulatory risk in the EU. Zcash, due to its technical architecture, offers a potentially safer alternative.
Leveraging Diversification Potential through New ETFs: Strong capital inflows into the newly launched Solana and XRP ETFs should be treated as an early signal that investors are seeking new sources of growth and portfolio diversification beyond the dominant assets (BTC and ETH).
Identification of Long-Term Signals in Market Noise: Moves such as the strategic funding raised by the Kraken exchange or Citi's support for MicroStrategy's strategy are strong signals of confidence in the long-term potential of the market.
4.4 Implications for FinTech Companies
Absolute Priority of MiCA Compliance: Obtaining a CASP license under MiCA is an absolute condition for survival and further development in the European market. Companies must prepare for significant costs related to operational and legal adaptation.
Strategic Caution in Product Offering: Maintaining assets like Monero in the product offering may lead to serious regulatory consequences after AMLR enters into force, including high financial penalties and loss of license.
Increased Importance of Security as a Competitive Differentiator: As MiCA institutionalizes the market, operational security becomes a key competitive differentiator.
5.0 Executive Summary and Strategic Perspective
Market analysis reveals a fundamental tension between short-term panic caused by macroeconomic factors and the long-term, structural integration of digital assets with the global financial system. The sharp correction confirmed the market's increasing correlation with Federal Reserve policy. Outflows from dominant ETFs contrast with strong capital inflows into new products (SOL, XRP) and strategic institutional moves (e.g., Kraken expansion), which signals growing maturity and diversification of institutional interest.
For European entities, the regulatory landscape is becoming the key battleground. Standardization under MiCA creates a transparent operational environment, while the restrictive AMLR regulations pose an existential threat to the entire privacy cryptocurrency segment. The winners will be those entities that balance short-term risk management with a long-term strategic vision, based on regulatory compliance, diversification, and operational security.
FAQ
What was the main cause of the sharp drop in cryptocurrency prices on November 20, 2025?
The sharp drop in prices, including Bitcoin to $86,600, was directly driven by unfavorable macroeconomic signals from the United States. These included a sharp decline in market expectations for an interest rate cut by the Federal Reserve (the probability dropped to 30% due to a lack of consensus within the Fed) and the publication of data indicating a stronger-than-expected labor market (creation of 119,000 new jobs).
What are the key differences in the regulatory approach to cryptocurrencies between the EU (MiCA/AMLR) and the USA (SEC)?
The European Union focuses on comprehensive standardization and security through MiCA, which introduces uniform standards for Crypto Asset Service Providers (CASPs). Simultaneously, the EU introduces the restrictive AMLR, which prohibits licensed entities from handling anonymous cryptocurrencies. In contrast, the United States, under the new SEC administration, signals a shift towards deregulation and a pro-innovation approach. Examples include the removal of cryptocurrencies from the SEC's examination priorities for 2026 and the withdrawal of accounting guidance SAB 121.
Are institutions withdrawing from the cryptocurrency market if ETFs are seeing outflows?
No, outflows from Bitcoin and Ethereum ETFs (e.g., a record single-day outflow of $523 million from BlackRock's IBIT) are largely linked to short-term macroeconomic uncertainty or the use of ETFs for basis trades. In contrast to these outflows, the growing interest in alternative ETFs, such as funds for Solana ($382.05 million in inflows) and XRP ($250 million on the first day), and strategic moves, such as Kraken exchange raising $800 million in financing, indicate long-term institutional confidence and a pursuit of diversification.
How do the new European AMLR regulations affect Monero and Zcash?
The AMLR regulation, entering into force in 2027, poses a serious risk to privacy cryptocurrencies because it prohibits licensed entities from handling anonymous assets. Monero (XMR), due to its mandatory and unconditional privacy, is fundamentally incompatible with AMLR and faces systematic delisting from exchanges operating in the EU. In contrast, Zcash (ZEC), thanks to its optional privacy feature and the innovative viewing key mechanism, has a potential path to regulatory compliance, which could make it a potentially safer alternative for institutions.
Disclaimer
This content aims to enrich readers' information and is for informational purposes only. It does not constitute financial, legal, or any other form of advice intended for specific use. Cryptocurrency trading involves high risk and volatility. The historical performance of an asset does not determine its expected future performance. Always conduct your own research and only use cash you can afford to lose before making an investment. Any activities related to buying and selling Bitcoin and other investments in crypto assets are the responsibility of the reader.