Bear market or seasonal slump? What this market flip is really telling us
Crypto markets just flipped from euphoria to fear, with over $1 trillion in value erased and bitcoin down nearly 30% from its peak. But beneath the volatility, the infrastructure — from stablecoin volume to institutional rails — is still compounding.
In the span of six weeks, crypto markets went from celebrating new highs to questioning whether we’re already in a bear. Bitcoin has dropped nearly 30% from its October peak around $126,000, while over $1 trillion in crypto market value has disappeared since early October.
So: is this the beginning of another prolonged winter? Or just a violent reset mid-cycle?
From where we sit, the structural signals say this isn’t a full regime shift. It’s a correction with teeth, not collapse. But that question — bear or slump — only matters if you’re trying to trade this quarter. The better question is what this move revealed about the architecture underneath it. Let’s walk through the data, the damage, and what Open Money sees that the headline charts miss.
From euphoria to exit in about 40 days
Start with the surface. Bitcoin has shed about 30% since the October high and is now trading in the $80,000–$90,000 range, its lowest in seven months. Crypto’s overall market cap dropped from $4.2 trillion to under $3 trillion, erasing more than $1 trillion in paper value.
The turning point was the October 10 “10/10” liquidation event, with roughly $20 billion in leveraged long positions wiped out in one session, the largest flush on record. That blast kicked off a feedback loop: prices dropped, flows turned, and liquidity vanished.
Digital asset funds saw $2 billion in outflows just last week, mostly from bitcoin and ether products. IBIT, which is BlackRock’s flagship bitcoin ETF, lost $523 million in a single day on November 18.
The macro overlay matters here. As equities rolled over and the Fed backed off rate cut expectations, investors rotated out of anything that falls in the "growth' bucket, which always includes crypto.
Daniel McGlynn
Is this a bear market or just a sharp reset?
This is literally the trillion dollar question as this point. But one issue to get clear on right away, is what do we even mean when we say bear market?
In crypto, bear market has come to mean three different things. First, the price-based definition: a 20% or greater drawdown, with persistent selling and negative sentiment. By that measure, yes, bitcoin is in a bear phase.
Second is the infrastructure-based view: the kind of bear market where hash rate collapses, user activity fades, stablecoin supply shrinks, and developer momentum dies off. That isn’t happening right now.
Then there’s the vibes-based test: number goes down long enough that everyone on Crypto Twitter starts a podcast about AI. That one might be creeping in.
Recent analysis adds nuance. AInvest calls this a correction, not a full bear, pointing to strong miner revenues and resilient network usage. BeInCrypto draws a similar line and points out that this is a mid-cycle breakdown that hasn’t yet crossed into full winter territory.
If you're focused on price, this is a bear. If you're focused on infrastructure, it's a reset.
Daniel McGlynn
The condition of the plumbing tells a story about the health of a structure
To understand where this goes next, look past the charts to the ETF flows, the options market, and the structure of liquidity itself.
Reuters covered IBIT’s record outflows and the broader retreat from spot ETFs as investors rotated out of risk. CoinShares’ latest flows report shows multi-week outflows from bitcoin and ether funds, alongside a modest uptick in demand for short-bitcoin products.
Options pricing confirms the tone. The odds of bitcoin finishing the year under $90,000 have risen to 50%, while the probability of closing 2025 above $100,000 has dropped to 30%.
Liquidity explains the speed of the fall. Kaiko’s breakdown of the October 10 drawdown shows what happens when market makers step back. During peak volatility, order books on major venues were effectively empty. That structural fragility turns routine selling into what feels like free fall.
Daniel McGlynn
Zoom out: the rails are still compounding
While tokens dropped, the infrastructure stayed online — and in many cases, accelerated.
Tatum’s latest research estimates over $300 billion in circulating stablecoins, with Q3 on-chain volume exceeding $15.6 trillion, which is more than Visa moved in the same period. None of that disappeared just because BTC printed a red candle.
Institutional integration is also holding. A joint report from Gemini and Glassnode framed 2025 as the year of macro adoption — bitcoin as collateral, not speculation. The drawdown is the first real test of that thesis. So far, the response looks more like risk management than exit.
Glassnode’s own weekly update from late October points to long-term holders distributing into strength, not panic-selling into weakness. That’s not what structural failure looks like.
Daniel McGlynn
So where are we, really?
If you’re asking whether this qualifies as a bear market, the honest answer depends on what lens you use. On price and sentiment, yes — this is a bear phase. The drawdown is deep, fear is back, and ETF flows are negative.
But the underlying structure doesn’t suggest we’ve entered another multi-year collapse. Hash rate, stablecoin volumes, and institutional integrations remain intact. This still looks like a mid-cycle flush with macro headwinds, not a full unwind.
The base case from data-driven shops like Glassnode, Kaiko, and CoinShares is cautious: choppy conditions while macro stays tight, gradual rebuilding once leverage fully clears, and potential upside if conditions improve.
Daniel McGlynn
Why Open Money is playing a different game
This is where the Open Money perspective matters most. These market cycles will keep happening. What changes is how transparent, resilient, and user-aligned the system becomes each time.
The Open Money approach starts with visibility. Kaiko’s forensic work on liquidity gaps during the October drawdown is the kind of post-mortem that helps future risk get priced up front, not just discovered all at once in a vacuum.
It prioritizes infrastructure over price. Whether bitcoin finishes the year at $75,000 or $110,000 matters less than whether borderless, programmable money continues to do more economic work. That’s the deeper metric, and its one that stablecoin growth and custody innovation continue to support.
Most of all, it frames this entire project as a governance question. Who builds the rails? Who controls them? Who benefits from them? Volatility doesn’t answer those questions — but it tests the systems that will.
So yes, we’re living through a classic market flip, where we are seeing a switch from euphoria to fear in just over a month. Whether you call it a bear market or a slump mostly depends on your time horizon.
But through the Open Money lens, the assignment hasn’t changed. We're still building a financial stack where volatility is acknowledged, stress tests are survivable, and the value of the system isn’t hostage to the last price tick.