Crypto Crash A “Rising Ache,” Backside Is Close to: Kobeissi Letter

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The crypto crash is only a “rising ache,” and with extra liquidity set so as to add to the document $137 trillion globally, the market is nearing a backside, The Kobeissi Letter stated.

In a Nov. 16 thread on X, the macro analysis outlet instructed its 1.1 million followers that the latest market sell-off is a “structural” shift in market dynamics reasonably than a collapse in crypto’s underlying worth.

“The basic worth of crypto has solely improved, however market dynamics are shifting,” it stated. “Each 25%+ downturn in crypto historical past has had the identical actual final result: buyers name for the top of crypto just for it to be adopted by new document highs.”

It famous that there’s extra liquidity on the way in which so as to add to the document $137 trillion in world M2 cash provide, with Japan getting ready a $110 billion-plus stimulus and US President Donald Trump vowing to present $2,000 stimulus checks to hundreds of thousands of People who aren’t already rich.

“As with all environment friendly market, the wrinkles will work their approach out,” it stated. ”We expect the underside is close to.”

Crypto Markets Reel

The agency’s feedback come as crypto markets reel from a pointy correction. Market leaders Bitcoin and Ethereum have plunged greater than 10% prior to now week and ETH is down 17.5% in a month.

XRP can be down 10% prior to now week whereas Solana has plummeted 16% prior to now week and 23.4% in a month.

To help its argument that crypto is near a backside, it posted an image of the Bitcoin vs gold chart.

“For 12+ months, Gold and Bitcoin moved with excessive correlation; the secure haven property,” The Kobeissi Letter stated. However gold has outperformed Bitcoin by 25 proportion factors since early October, it added, suggesting that higher occasions are forward for BTC if the correlation is to renew.

Due to this fact, if you actually zoom out, it appears that evidently crypto is in a “structural” bear market.
The basic worth of crypto has solely improved, however market dynamics are shifting.
As with all environment friendly market, the wrinkles will work their approach out.
We expect the underside is close to. pic.twitter.com/ra2QaFwoHy
— The Kobeissi Letter (@KobeissiLetter) November 16, 2025

Leverage Performed A Main Function In Crypto Market Crash

The Kobeissi Letter stated extreme leverage is behind the crypto market crash, with merchants typically utilizing 20x, 50x, and even 100x leverage, including that even a 2% transfer at 100x leverage could also be sufficient to wipe out a commerce.

“When hundreds of thousands of merchants are utilizing leverage, this results in a domino impact,” it stated, including that the market was weak to sharp liquidations as soon as costs turned decrease.

These positions are actually being compelled out, one thing the agency says is a painful however needed reset forward of the following accumulation.

The correction started on Oct. 10, it stated, when a document $19 billion in leveraged positions had been liquidated after Trump introduced 100% extra tariffs on China’s exports.

It famous that crypto funds noticed round $1.2 billion in outflows in simply the primary week of November and that leverage led to 3 days of $1 billion-plus in liquidations prior to now 16 days, whereas “every day liquidations of $500+ million have change into a traditional incidence.”

It additionally seems to be a structural and mechanical downturn.
All of it started with institutional outflows in mid-to-late October.
Within the first week of November, crypto funds noticed -$1.2 billion of outflows.
The issue turns into extreme ranges of leverage AMID these outflows. pic.twitter.com/m5ZHgygNPx
— The Kobeissi Letter (@KobeissiLetter) November 16, 2025