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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 mentioned.
In a Nov. 16 thread on X, the macro analysis outlet informed its 1.1 million followers that the latest market sell-off is a “structural” shift in market dynamics slightly than a collapse in crypto’s underlying worth.
“The elemental worth of crypto has solely improved, however market dynamics are shifting,” it mentioned. “Each 25%+ downturn in crypto historical past has had the identical actual consequence: 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 making ready a $110 billion-plus stimulus and US President Donald Trump vowing to offer $2,000 stimulus checks to thousands and thousands of People who aren’t already rich.
“As with all environment friendly market, the wrinkles will work their means out,” it mentioned. ”We predict 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% up to now week and ETH is down 17.5% in a month.
XRP can be down 10% up to now week whereas Solana has plummeted 16% up 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 protected haven property,” The Kobeissi Letter mentioned. However gold has outperformed Bitcoin by 25 proportion factors since early October, it added, suggesting that higher instances are forward for BTC if the correlation is to renew.
Due to this fact, whenever you actually zoom out, it appears that evidently crypto is in a “structural” bear market.
The elemental worth of crypto has solely improved, however market dynamics are shifting.
As with all environment friendly market, the wrinkles will work their means out.
We predict 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 mentioned extreme leverage is behind the crypto market crash, with merchants usually 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 thousands and thousands of merchants are utilizing leverage, this results in a domino impact,” it mentioned, including that the market was susceptible to sharp liquidations as soon as costs turned decrease.
These positions at the moment are being pressured out, one thing the agency says is a painful however crucial reset forward of the following accumulation.
The correction started on Oct. 10, it mentioned, when a document $19 billion in leveraged positions had been liquidated after Trump introduced 100% further 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 a few days of $1 billion-plus in liquidations up to now 16 days, whereas “each day liquidations of $500+ million have change into a standard prevalence.”
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
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