Updated on 21st November 2025
The crypto market slump is showing signs of stress due to liquidity problems among major market makers. This shortage is creating big changes in digital asset prices.
Bitcoin, Ethereum, and other main cryptocurrencies are seeing prices go down again. The market is still trying to recover after last month’s large sell-off. Analysts suggest that this phase could continue until market makers restore their financial positions.
What Is Causing the Crypto Market Slump?
The recent crypto market slump can be linked to pressure on the balance sheets of market makers, according to Tom Lee, chairman of the Ether treasury firm BitMine. Lee explained in an interview with CNBC that the October 10 crash became a major turning point for the market.
The market lost over $20 billion in crypto trading during that single day. He noted that this sudden hit left several market makers struggling to regain stability. Lee said that this sudden liquidity hit left many market makers unprepared.
According to him, the reduction of capital, along with the losses in the recent trading sessions, has increased the difficulty of market makers to provide normal liquidity in the market. Before the decline, Bitcoin was trading at over $121,000, but it is now close to $85,528.80.
The slide shows how much force the recent sell off carried. The drop also reflects the growing pressure that continues to weigh on the market. Ethereum has moved in the same direction, reflecting broad weakness across major tokens. These similar drops highlight the growing strain within crypto trading.
Who Is Tom Lee, and What Does He Say About the Slump?
Tom Lee, the cofounder of Fundstrat and chairman of BitMine, has spent years studying the movement of cryptocurrencies. He compares crypto market makers to central banks because of the crucial role they play in keeping trading liquid.
In his view, the ongoing crypto market slump reflects the struggle these firms face as they try to repair their balance sheets. He believes the recent shocks forced them into a long and difficult rebuilding process after taking heavy losses.
Lee said that when a market maker’s balance sheet weakens, the first response is usually to cut back on trading and sell off parts of their holdings. He noted that this is a common way for them to raise quick capital.
According to him, the steady selling seen in recent weeks fits this pattern. He pointed out that the market is now feeling the effects of that slow but constant pressure.
How Are Market Makers Impacting Crypto Prices?
Market makers keep the crypto market working by providing the liquidity it needs. When they start losing capital, they must reduce their trading activity. This reduction affects how smoothly the market works.
It often leads to prices falling even further. Lee believes this process of unwinding may continue for a few more weeks. He compared it to a similar stretch in 2022, when it took about eight weeks for the market to steady itself after a liquidity shock.
Lee said the current crypto market slump shows how weak liquidity has become. He also noted that Bitcoin and Ethereum often signal what may come next in the equities market because of this continuing unwind.
What Are Experts Predicting for the Weeks Ahead?
Analysts are keeping a close eye on the market to see when it might steady. Many share Lee’s view that any recovery will take time. With market makers holding less liquidity, even small waves of selling can push prices lower.
This makes the market more sensitive to sudden moves. Priya Sharma, a senior analyst at Digital Asset Insights, said the crypto market slump will likely continue until market makers return to full strength.
She explained that investors should stay careful during this period. Sharma also noted that there may be better buying chances once balance sheets improve. She advised traders to watch the market closely as conditions change.
Can the Market Recover Soon?
Recovery will rely on how quickly liquidity returns to the market. As market makers rebuild their capacity, the pace of price drops may begin to ease. This could slowly bring back some confidence among investors.
Experts think the market will keep swinging for some time. Lee said the market is having a tough time but it is still holding on. He noted that it has been six weeks since the trouble began.
In his view, past patterns suggest the market may start to steady soon. He believes a gentle recovery could appear in the next couple of weeks.
Conclusion
The recent crypto market slump highlights just how crucial market makers are for keeping prices steady in digital assets. Bitcoin has dropped to around $85,528.80, and while other top cryptocurrencies are also falling, analysts view this as a normal market reset rather than a crisis.
Experts explain that the market needs time to resolve liquidity problems caused by market makers reducing their activity to manage losses. Investors are advised to be patient during this recovery phase, which could take a few weeks. Tom Lee believes that as market makers regain footing, the selling pressure will ease.
Once liquidity returns and market makers rebuild their balance sheets, the crypto market slump should start to improve. This recovery could set the stage for a more stable and upward market trend, helping prices find clearer direction in the near future.
Glossary
Sell Off: When a lot of people sell their crypto at once, prices drop fast. That’s called a sell off.
Balance Sheet: A balance sheet shows what a company owns and what it owes. If it’s weak, it means the company has taken losses.
Crypto Crash: A crypto crash is a sudden, big fall in major crypto prices.
Market Maker: A market maker is a firm that keeps trading active by always buying and selling assets.
Unwinding: Unwinding means reducing or closing positions to fix financial issues or cut losses.
Frequently Asked Questions About Crypto Market Slump 2025
What is causing the crypto market slump in 2025?
The crypto market slump in 2025 is mainly because there is less money flowing through the system. Market makers do not have enough funds to keep prices stable.
What does Tom Lee say about the market slump?
Tom Lee says the slump is happening because market makers are trying to rebuild after losing a lot of money.
What happened on October 10?
On October 10, the crypto market suddenly dropped and about $20 billion dwere lost in a short time.
Why are Bitcoin and other coins falling?
Bitcoin and other coins are dropping because market makers are selling their assets to recover money they lost earlier.
How far did Bitcoin drop after the crash?
Bitcoin fell from more than one hundred twenty-one thousand dollars to about $85,528.80 after the crash.
Is Ethereum affected by the slump?
Yes, Ethereum is also falling because the whole crypto market is under the same money shortage.
How long could this slump continue?
This slump might continue until market makers fix their balance sheets and bring back more funds into the market.
Sources
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