Analysts: Due to the ongoing impact of the U.S. government shutdown, risk aversion sentiment will continue to affect Crypto Assets and other speculative assets.

Bitcoin plummeted to $81,900 on Friday, erasing Thursday's rebound and further extending a month-long dumping spree, with the market capitalization of Crypto Assets evaporating by over $1.4 trillion. Bitcoin's current trading price is more than 30% lower than its historical high in October, and the total market capitalization of the entire Crypto Assets market has also fallen below $3 trillion.

Analysts say that the market's big dump may worsen further. Citrini Research warned in a report sent to investors that risk-averse sentiment will continue to impact speculative assets like crypto assets until mid-December. This is because investors are still dealing with the effects of the longest government shutdown in U.S. history, which could “trigger” market volatility. Kiln research director Robert Le stated, “If Bitcoin deviates from its established trend, I think the market may underestimate its upside potential and downside risk.”

A series of adverse factors are severely impacting the risk appetite in the Crypto Assets and stock markets. Wall Street experienced one of the most intense intraday reversals in years, Nvidia's rally came to an abrupt halt, and new macroeconomic data heightened concerns that the Federal Reserve may delay interest rate cuts.

The icing on the cake is Bitcoin's four-year cycle, which is closely related to the expected price volatility pattern and Bitcoin's halving event that occurs every four years, at which point the rewards for miners validating the blockchain will be halved. An increasing number of analysts believe that institutional adoption of digital assets has rendered this statement outdated.

Robert Le added: “If Bitcoin is deviating from its established cycle, I think the market may be underestimating its upward potential and downward risk.”

In the past 24 hours, the total liquidation amount across the network reached $2 billion. DefiLlama data shows that on Thursday, investors withdrew $548 million from Bitcoin ETFs, bringing the total capital outflow for November to $3.77 billion, with BlackRock IBIT clients redeeming $355 million, marking the worst month for ETFs since February. (DL News)