Bitcoin News Today: Crypto Stocks Plunge as Liquidations, Hacks, and Fed Uncertainty Fuel Sector-Wide Turmoil

The U.S. stock market's crypto-related equities faced a broad pullback in pre-market trading on November 4, with MicroStrategy (MSTR) leading the decline after dropping 3.30%, according to a Coinotag report. Coinbase Global (COIN) fell 3.12%, Robinhood (HOOD) slid 3.35%, and other names like Silvergate (SBET) and Bitmain (BMNR) posted losses of 4.28% and 4.90%, respectively, per a Lookonchain update. The selloff followed a similar trend the prior day, when the S&P 500 and Nasdaq opened higher but crypto stocks still dipped, with MSTR down 1.59% and CRCL falling 2.14%, according to another Lookonchain report. Analysts attributed the declines to broader market volatility and a crypto sector grappling with a sharp correction.

The crypto market itself experienced a $1.2 billion liquidation event on November 3, driven by a rapid 3% drop in Bitcoin (BTC) and Ethereum (ETH) within an hour, according to an FXStreet report. The crash was exacerbated by leveraged long positions being triggered, with over $1.1 billion in long liquidations reported. High-profile traders, including 0xc2a3 and Machi Big Brother, suffered significant losses, while others like a key Bitcoin OG positioned for a rebound. The decline, fueled by U.S. investor sentiment and a negative Coinbase Bitcoin Premium Index, raised concerns about liquidity and stability in the sector.

Compounding the turmoil, the DeFi lending protocol Moonwell suffered a $1 million exploit on November 4, linked to an offline oracle providing faulty rsETH/ETH price data, according to a Lookonchain report. The attack, detected by blockchain security firm BlockSec, exploited delayed price updates to manipulate collateral valuations, enabling arbitrage and draining funds from lending pools, according to a Coinotag report. This incident added to DeFi's recent vulnerabilities, including a December 2024 exploit that cost $320,000. Security experts warned of systemic risks from oracle misconfigurations, urging protocols to adopt multi-source price verification and faster heartbeat intervals, according to a Coinfomania report.

Amid the volatility, the Federal Reserve's $125 billion liquidity injection over five days sparked speculation about a potential December rate cut, with markets pricing in a 67.3% chance of a 25-basis-point reduction, according to a Coinedition article. BitMEX co-founder Arthur Hayes argued the Fed's actions signaled an "invisible QE" cycle, which could reignite a Bitcoin bull market by boosting liquidity and inflation expectations, in a Weex article. However, traders remained cautious, with BTC trading at $104,218-a 16% drop from its monthly high-amid ongoing uncertainty about macroeconomic conditions and regulatory developments.