Bitcoin News Today: Crypto's Freefall Exposes U.S. Liquidity Clash Between Treasury and Fed

The cryptocurrency market is in freefall, with Bitcoin (BTC) trading near $82,605 on November 21, 2025, after a sharp 4.53% decline in a single day. The selloff has erased over $120 billion in market value, pushing the total crypto market cap below $2.8 trillion - a level not seen since the 2022 collapse of TerraUSD and FTX. Raoul Pal, CEO of Real Vision, has sounded the alarm, arguing that the turmoil reflects deeper issues in U.S. liquidity plumbing and warns of a potential contagion to broader markets if policymakers fail to act.

Bitcoin's recent plunge extends a month-long rout, with the asset down 23% for November - the worst monthly performance since 2022. The decline has been exacerbated by heavy liquidations, with over $1.9 billion in leveraged positions wiped out in four hours alone. Ethereum (ETH) and Solana (SOL) have also suffered double-digit losses, amplifying investor fear. Analysts point to fading expectations for Federal Reserve rate cuts, macroeconomic uncertainties, and a liquidity crunch as key drivers of the downturn.

The sell-off has spilled into institutional markets, with U.S.-listed Bitcoin ETFs recording $903 million in outflows on November 14 - the second-largest redemption since their launch. Open interest in Bitcoin futures has fallen 35% from October's $94 billion peak, signaling a retreat in speculative activity. Meanwhile, Bitcoin's futures-to-spot basis turned negative for the first time since March, reflecting growing caution among traders.

Raoul Pal has framed the crisis as a symptom of a broader liquidity struggle between the U.S. Treasury and the Federal Reserve. He argues that the Treasury's push to direct liquidity toward Main Street via banks could clash with the Fed's traditional quantitative easing strategies, creating a "fiscal dominance" scenario. "Crypto is currently trading like a stressed funding vehicle reflecting the broken plumbing," Pal said, warning that stocks could face similar pressures if liquidity constraints persist.

Market analysts are divided on the path forward. Some view the selloff as a structural reset driven by excessive leverage and macroeconomic rotations, while others fear a repeat of the 2018–2019 market stress if policymakers delay intervention. The Fed is reportedly considering $25 billion in monthly asset purchases starting in early 2026 to stabilize reserves, though such measures could distort market dynamics.

With Bitcoin below $84,500 - a critical support level - investors remain on edge. The Crypto Fear & Greed Index hit 11/100, its lowest since mid-2023, as altcoins like Solana and XRP trade at multi-month lows according to recent reports. For now, the market awaits clarity on Fed policy and liquidity injections, with Pal suggesting that a resolution could determine whether crypto's bear market deepens or sparks a rebound.