Bitcoin News Update: Crypto Shares Tumble Amid Liquidations, Security Breaches, and Federal Reserve Ambiguity Causing Market-Wide Upheaval

On November 4, U.S. stocks with ties to the crypto sector saw widespread declines during pre-market hours, with MicroStrategy (MSTR) leading the losses by falling 3.30%, as reported by a

. (COIN) dropped 3.12%, (HOOD) slipped 3.35%, while Silvergate (SBET) and Bitmain (BMNR) recorded losses of 4.28% and 4.90%, respectively, according to a . This wave of selling mirrored the previous day, when the S&P 500 and Nasdaq opened in positive territory, but crypto stocks still retreated, with down 1.59% and losing 2.14%, based on . Analysts pointed to overall market turbulence and a sharp correction in the crypto industry as the main drivers of the declines.

The cryptocurrency market itself faced a $1.2 billion liquidation on November 3, triggered by a swift 3% plunge in

(BTC) and (ETH) within just one hour, as noted in an . The drop was intensified by the forced closure of leveraged long positions, resulting in more than $1.1 billion in long liquidations. Notable traders such as 0xc2a3 and Machi Big Brother incurred heavy losses, while a prominent Bitcoin OG took a position anticipating a rebound. The downturn, influenced by negative U.S. investor sentiment and a declining Bitcoin Premium Index, sparked worries about the sector’s liquidity and resilience.

Adding to the instability, the DeFi lending platform Moonwell was exploited for $1 million on November 4, due to an offline oracle that supplied incorrect rsETH/ETH price information, according to a

. Blockchain security company BlockSec identified the attack, which took advantage of delayed price updates to manipulate collateral values, allowing for arbitrage and draining of lending pools, as detailed in a . This event added to recent DeFi security breaches, including a $320,000 exploit in December 2024. Security professionals cautioned that oracle misconfigurations pose systemic threats, recommending that protocols implement multi-source price checks and shorter heartbeat intervals, as reported by a .

During this period of heightened volatility, the Federal Reserve’s injection of $125 billion in liquidity over five days fueled speculation about a possible rate cut in December, with markets estimating a 67.3% probability of a 25-basis-point reduction, according to a

. Arthur Hayes, co-founder of BitMEX, suggested that the Fed’s actions represent a form of “stealth QE,” which could spark another Bitcoin rally by increasing liquidity and inflation expectations, as discussed in . Despite this, traders remained wary, with trading at $104,218—a 16% decrease from its monthly peak—amid persistent uncertainty over macroeconomic trends and regulatory changes.