The cryptocurrency market in November marked one of its weakest months in the last three years. Prolonged government shutdowns in the United States significantly impacted Bitcoin and Ethereum’s monthly performance, eroding investor confidence. Altcoins also faced considerable selling pressure, with only a few projects managing to sustain their upward momentum.
Bitcoin’s Waning Momentum
November’s economic environment shaped under the shadow of a prolonged U.S. government shutdown. The furlough of public employees curtailed real economic activity, dampening appetite for risky assets. While stocks indicated recovery signals, Bitcoin’s value plummeted over 18%, recording its second-worst performance in three years.
Gold, on the other hand, surged by 7%, reclaiming its status as a safe haven. Conversely, Bitcoin’s increasing correlation with stock markets fueled concerns that a potential S&P 500 correction might precipitate sharper declines in cryptocurrencies. Social media’s negative sentiment bolstered this outlook, with investors depicting the market as entering a “dull phase” due to a lack of new narratives.
On-chain data revealed that long-term investors accelerated profit-taking, while short-term wallets suffered losses. Analysts observed that the $66,000 level, the average cost threshold for 1-2 year investors, might re-establish itself as an accumulation zone.
Stagnation Dominates Ethereum and Other Networks
Ethereum also experienced its second-worst month of the year, achieving positive closure only thrice throughout the year. The debate over ETH’s asset class categorization remains unresolved. It’s caught between digital gold-like value storage and conventional tech stock categorization, increasing price volatility due to this ambiguity.
On the BNB Chain, transaction numbers fell by 32%, reaching a three-year low. Transaction fees, which peaked at $71 million in the third quarter, dropped to $17 million in November. Solana’s memecoin activity decline led to a decrease in DEX volume to $104 billion. Yet, spot Solana ETFs attracted net inflows for 21 consecutive days, reaching $619 million.
Tron maintained strength compared to other networks due to high revenue from USDT transfers. In contrast, despite Base setting a transaction record, it witnessed its lowest active address count for the year. Meanwhile, the new project Plasma lost investor trust with a 68% stablecoin volume drop and a 90% coin crash.