Bitcoin News Today: AI's Ascent Accelerates Bitcoin's Plunge Amid Gamma-Driven Selling

Bitcoin's recent plunge has intensified market fragility, with options-driven selling and retail investor behavior compounding a broader selloff. The cryptocurrency fell as much as 7.6% on Nov. 21 to $80,553, marking its worst monthly decline since the 2022 collapse of Terra and FTX. The drop has erased nearly 25% of its value this month, driven by spot selling, ETF redemptions, and fading momentum trading demand. However, options markets have amplified volatility as Bitcoin breaches key price levels, triggering gamma exposure dynamics that force market makers to adjust hedges in ways that can accelerate downward moves.

At $85,000, a critical support level, Bitcoin's price collapse activated heavy short-gamma positions. Market makers, who are typically short gamma at this level, sell more Bitcoin as prices fall to maintain neutrality, creating a self-reinforcing cycle of selling. This dynamic is expected to persist until Bitcoin reaches $80,000, where dealers' positioning flips to long gamma, potentially softening further declines as they buy to hedge according to market analysis. JPMorgan analysts highlighted that retail investors have sold about $4 billion from spot Bitcoin and ether ETFs this month, a key driver of the correction. Unlike October's selloff, which stemmed from crypto-native traders deleveraging in futures, November's outflows reflect non-crypto retail investors using ETFs as entry points, signaling a shift in market sentiment according to JPMorgan research.

The selloff has pushed Bitcoin below its 2025 realized price of $103,227, leaving the average 2025 buyer with a 13% loss. This mirrors April's correction, which saw prices fall from $109,000 to $76,000 over 80 days. However, November's decline has been shorter but steeper, raising concerns about liquidity and institutional participation. Meanwhile, the broader crypto market's capitalization has dipped below $3 trillion, with Bitcoin ETFs recording their first major inflow in weeks on Nov. 21, taking in $238 million as prices stabilized near $84,000 according to market data.

The correction also underscores broader structural shifts. AI's rise is reshaping crypto liquidity, with companies like Bitfarms pivoting from Bitcoin mining to AI infrastructure, and Oracle's $300 billion cloud deal sparking debates about whether AI is eclipsing crypto as the dominant risk asset. Analysts note that venture capital once directed to blockchain projects is now funding AI models and infrastructure, while Bitcoin miners seek higher-margin opportunities in AI data centers.

Retail investors, however, continue to treat crypto and equities as separate asset classes. Despite $4 billion in crypto ETF outflows, they've poured $96 billion into equity ETFs this month, suggesting crypto's volatility isn't deterring broader risk appetite. JPMorgan's Nikolaos Panigirtzoglou emphasized that the crypto sell-off doesn't reflect a generalized retreat from risk, as equity buying remains robust.

As Bitcoin approaches $80,000, market participants brace for a potential pivot in gamma dynamics. Yet, with AI's ascent and regulatory scrutiny intensifying-such as the UK's revelation of a crypto-fueled crime network funneling drug money to Russia-regulatory scrutiny has intensified(according to UK authorities) and the UK's revelation of a crypto-fueled crime network funneling drug money to Russia-Bitcoin's path to recovery remains clouded by both technical and macroeconomic headwinds.