Crypto Market Recalibration: Drivers and Outlook

Friday Nov 28 2025 03:10

Duration

2 min

  1. 1. Key Takeaways

  2. 2. Introduction

  3. 3. Macro Shift and Risk-Off Sentiment

  4. 4. ETFs and DATs: Weakening Demand

  5. 5. Crypto Market Deleveraging

  6. 6. Shallow Spot Liquidity

  7. 7. Conclusion

Key Takeaways

  • Weakening demand from ETFs and Digital Asset Treasuries (DATs) is putting pressure on the market.
  • October's deleveraging event significantly reduced leverage, lowering systemic risk.
  • Spot market liquidity remains weak, increasing market fragility.

Introduction

After a strong start to "Uptober" fueled by Bitcoin's all-time highs, optimism was quickly dashed by a flash crash. Bitcoin has since fallen roughly $40,000 (over 33%), and altcoins have been impacted even more, bringing the overall market capitalization close to $3 trillion. Digital assets appear to be at the intersection of multiple external and internal forces.

Macro Shift and Risk-Off Sentiment

The performance divergence between Bitcoin and major asset classes is widening. Meanwhile, tech stocks (NASDAQ) have lost momentum. This impacts market sentiment.

ETFs and DATs: Weakening Demand

Bitcoin's recent weakness is partially attributed to weakening capital absorption channels. ETFs have experienced net outflows for several weeks, totaling $4.9 billion. Digital Asset Treasuries (DATs) are also facing pressure, limiting their ability to raise new capital and boost crypto asset allocations.

Crypto Market Deleveraging

The crash on October 10th kicked off a deleveraging cycle across futures, DeFi, and stablecoins. Perpetual futures leverage has been significantly cleaned up, indicating market stabilization and repricing. DeFi lending markets have also experienced a deleveraging process.

Shallow Spot Liquidity

Spot market liquidity has failed to recover since the October 10th crash. The market is more fragile due to fewer buy and sell orders, amplifying price volatility. The situation is even worse for altcoins.

Conclusion

The digital asset market is undergoing a comprehensive recalibration. Meanwhile, the macro environment remains a headwind. The market will only stabilize and reverse when key demand channels (ETF flows, DAT accumulation, stablecoin supply growth) resume, coupled with improved spot market liquidity. Until then, the market will remain in a tug-of-war between a 'risk-off macro environment' and 'crypto market internal structural changes'.

Risk Warning: This article represents only the author’s views and is provided for informational purposes only. It does not constitute investment advice, investment research, or a recommendation to trade, nor does it represent the stance of the Markets.com platform. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.

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Written by:

Ava Grace

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