The crypto market crash intensified on Friday, Nov. 14, with Bitcoin and most altcoins leading the way. Altcoins like Story (IP), Aerodrome Finance (AERO), Jupiter (JUP), and Pudgy Penguins (PENGU) are the top laggards. So, will crypto go back up following this crash?
Why the crypto crash is happening
The crypto market crash is happening for several reasons. The most notable one is that investors are coming to terms with the $20 billion liquidation that happened on October 11 after Donald Trump announced a 130% tariff on Chinese goods. Over 1.6 million traders were liquidated.
Since then, many investors have remained in the sidelines and many more have stopped using leverage completely after observing the risks involved. Additionally, many investors have opted to stop it altogether, which is evidenced by the falling futures open interest, which has moved to the lowest level in months.
The rising risk has led to increased fear among investors, with the Crypto Fear and Greed Index moving downwards to 25. Crypto prices normally fall when there is fear in the market.
Additionally, the crypto market crash is because Bitcoin price has formed numerous bearish chart patterns, including a death cross and s double-top on the daily chart. It also formed a rising wedge pattern on the weekly chart, pointing to more downside in the near term.
The crypto market crash also happened as demand from American investors. Data shows that Bitcoin and Ethereum ETFs have shed billions of dollars in assets in the past few months.
READ MORE: Here’s why the XRP price is crashing as XRPC ETF inflows soar
Will crypto go back up?
History suggests that the crypto market crash will end and trigger more gains in the coming weeks or months.
For one, while this correction is painful, it is not the worst thing that happens in the past 16 years. The Bitcoin price has dropped by 22% from its highest level this month.
Historically, the coin has had steeper dives than that. For example, Bitcoin price dropped by 31% from its highest level in January to its lowest point in April.
Before that, the coin crashed by 35% from its highest level in March and its lowest level in August last year. Its other big bear market was in January 2024, when it dropped by over 20% within weeks.
In all these scenarios, Bitcoin has always bounced back and moved to a record high. This is in line with what a report by Bitfinex said:
“The takeaway is that whales are not dumping in fear but gradually taking profits into a softer ETF demand environment — a pattern observed repeatedly in prior cycles. These rebalancing periods typically reset positioning and volatility before the next leg higher, once inflows and liquidity conditions improve.”
Catalysts for the crypto market
There are potential catalysts that will drive the crypto market higher in the coming months.
First, the ongoing crash has brought the valuations of most tokens much lower in the past few weeks. With many of them being highly oversold, there is a likelihood that investors will start to buy the dip soon.
Second, the Federal Reserve will maintain a dovish tone in the coming months, especially when Donald Trump replaces Jerome Powell as the Federal Reserve chair. The mentioned candidates, like Rick Rieder and Kevin Hassett, have all hinted that they support low interest rates. Crypto prices tend to do well when the Fed is cutting rates.
Third, the Securities and Exchange Commission has started approving spot altcoin ETFs, most of which have had strong inflows. Hedera ETF has attracted over $76 million in inflows, while Solana funds have gained over $370 million in assets.
As such, the ongoing divergence between inflows and price movement will likely end, with top coins rebounding.
READ MORE: Ethereum price prediction as death cross forms, ETF and staking outflows rise
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