Important points
Are crypto markets officially in a bear cycle?
While Bitcoin and the total cryptocurrency market are under pressure, capital is still looking for growth spots, indicating a healthy reset.
Where is investor money flowing now?
Investors are shifting towards outperforming assets and on-chain RWA, highlighting selective bullish conviction in the market.
Are cryptocurrencies officially in a bear market?
The all-time high broke support and $1.85 billion was liquidated on November 4th, with fear reaching an extreme. Taken together, these signs indicate that capital will flow out of the sector and the total crypto market cap will reach billions of dollars.
In other words, market momentum has turned bearish and investors are avoiding risk in both spot and derivatives. Still, there are signs that this might just be a “healthy” reset rather than a full-blown crash.
Bear market theory strengthens as crypto traders avoid risk
Bitcoin [BTC] If the price breaks above $100,000, the bearish setting will be strengthened.
Add in the altcoin season index returning to early August levels and it looks like a full bear cycle. To support this, TOTAL2 (formerly BTC market capitalization) has fallen by 9% this week, losing about $240 billion.
Funds are basically not flowing into “high-risk, high-return” businesses. Rather, traders are playing it safe. This keeps the bearish narrative alive and will see about $470 billion exit the crypto market this week.
Source: TradingView (Total)
Notably, the derivatives market shows a similar trend.
In less than a week since November started, nearly $4 billion has been wiped from the market, about 77% of which came from long positions. In other words, about $3.08 billion was drained during the long squeeze.
Therefore, the cryptocurrency market is showing strong bearish momentum.
Both spot and derivatives traders are actively risk-averse, altcoin rotation remains subdued, and BTC has broken through an important floor. So, is betting short on the crypto market a logical choice in this environment?
Cryptocurrency market rebalances as capital chases winners
Looking at the flows, investors are clearly chasing opportunities.
Zcash [ZEC] has led the way with consecutive record highs, with an average weekly occupancy rate of 30% over the past three weeks. Despite the overheated market, bulls are regaining confidence in privacy tokens.
Solana [SOL] It’s not even late. Despite bearish pressure, the company’s ETFs have attracted an average of $45 million daily, while BTC and Ethereum have [ETH] ETFs continue to see capital outflows, and investors are seeing clear changes in their portfolios.
Source: Farside Investors
In other words, these developments indicate that the market is still far from a full bear cycle.
While capital is not widely circulating in altcoins, investors are pursuing opportunities in newer utility-driven businesses, with ZEC and SOL leading the way. The Real World Assets (RWA) sector also supports this trend.
The sector rose 6.8% to 35.83 billion ATH. This means that even though the crypto market has cooled down, capital is still looking for growth spots. In this context, investors are repositioning rather than exiting, and the market remains bullish.