Bitcoin News Today: Investors' 'Extreme Fear' as Crypto Market Stagnates Near $3.7T Cap

Bitcoin's price action has stagnated in recent weeks, sparking comparisons to a muted initial public offering (IPO) as market participants grapple with a confluence of bearish pressures. Analysts point to declining on-chain liquidity, looming token unlocks, and institutional outflows as key culprits behind the cryptocurrency's lackluster performance, with the total crypto market capitalization hovering near $3.7 trillion amid widespread investor caution, according to a Coinotag report.

On-chain liquidity, a critical metric for decentralized finance (DeFi) protocols, has plummeted by $7.94 billion since peaking at $157.64 billion on October 27, now standing at $149.7 billion. This decline reflects a sharp retreat in buying interest, with sellers dominating the market as uncertainty grows. Compounding the issue, over $310.56 million in tokens will unlock over the next two weeks, with $51.26 million becoming tradable this week alone. Such supply injections, analysts warn, risk exacerbating downward momentum in an already fragile environment. "Token unlocks in a fearful market amplify volatility, as holders rush to sell before prices erode further," noted blockchain researcher Alex Thorn.

Institutional outflows have further deepened the malaise. Exchange-traded funds (ETFs) for Bitcoin and Ethereum recorded net redemptions of $1.22 billion in just two days (October 29–30), according to DeFiLlama data. This exodus from large investors has flooded the market with supply, dampening prices and deterring retail participation. Meanwhile, corporate crypto purchases hit a seven-week low of $364.98 million, a stark contrast to the $6.67 billion peak in late August. Reduced corporate buying, analysts say, often precedes extended periods of price consolidation.

Recent on-chain activity offers a mixed picture. A major Bitcoin whale, identified as Owen Gunden, deposited 193.77 BTC ($21.49 million) into Kraken on November 2, according to a Coinotag article. However, this movement has yet to translate into broader bullish momentum. Separately, a liquidity sweep between $111,000 and $117,000 triggered $240 million in liquidations, clearing overleveraged positions and stabilizing open interest, as noted in a Coinotag piece. While this event may pave the way for a potential rebound above $115,000, prices remain constrained by technical indicators. The Fear and Greed Index, a gauge of market sentiment, sits at 28—a level classified as "extreme fear"—highlighting the fragility of investor confidence.

The path forward remains uncertain. If liquidity continues to contract and token unlocks proceed unimpeded, analysts project sustained pressure on the crypto market, potentially testing support levels near $3.5 trillion in capitalization, the Coinotag report notes. However, positive catalysts such as regulatory clarity or favorable macroeconomic shifts could alter this trajectory. For now, investors are advised to prioritize risk management and monitor on-chain signals for signs of stabilization.