A massive flash crash has shaken the crypto market.
Nothing reflects this better than the OFFICIAL TRUMP coin. From a technical standpoint, TRUMP just hit a new all-time low of $1.13, marking a 98.56% drop from its peak.
To put that into perspective, a $10,000 investment made in January 2025 would now be worth just $144. That’s a brutal drawdown, highlighting the scale of the ongoing sell-off.
However, there is more to the damage than just price. TRUMP’s collapse highlights an increase in macroeconomic uncertainty and a change in sentiment toward the U.S. crypto market.
Reinforcing this, Bitcoin’s Coinbase Premium Index continues to trade in the negative, indicating that there is less demand from U.S. investors. With both signals flashing caution, the upcoming macro week could prove critical.
As highlighted above, six key events are set to take center stage this week.
According to AMBCrypto, the inflation numbers for October could cause another crypto wipeout. After a sharp 9% jump in oil prices in September, which caused 0.3% monthly inflation, the entire crypto market dropped 9% in October.
Given oil prices rose a further 15% in October, inflation risks remain elevated. A hotter-than-expected reading could add fresh macro pressure, putting risk assets under further stress.
This brings the focus to the recent $1 billion crypto flash crash. With a major macro week ahead, rising inflation risks, and market sentiment deep in extreme fear, is this wipeout beyond just a deleveraging event?
Extreme fear looms as crypto capitulation risks continue to build
The technical picture is starting to reflect wider market sentiment.
As mentioned above, the fall of Official TRUMP [TRUMP] demonstrates the increasing amount of FUD in the U.S. crypto market, which has been exacerbated by the Democrats winning the mid-term elections.
In this context, the recent crypto wipeout could be more than just a healthy deleveraging phase. Instead, it points to weakening investor confidence and a broader shift in market momentum.
On-chain data further supports this trend. As the chart below highlights, the Crypto Fear and Greed Index fell from 50 to 29 (indicating a change from neutral to fearful) in under a week. It is now only 4 away from indicating extreme fear.
With the risk of a crypto wipeout still elevated, a further drop into “extreme” fear remains on the table.
In short, capitulation risks remain high.
This puts November’s crypto rally in danger. Despite the recent carnage clearing out excessive leverage from the market, weak sentiment and increased macro uncertainty mean that there is potential for further downside, with another crypto sell-off still a possibility.
Final Summary
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TRUMP’s 98.56% crash, negative Coinbase Premium, and rising inflation risks highlight weakening confidence in the U.S. crypto market.
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The $1 billion wipeout may be more than deleveraging, as extreme fear and macro uncertainty keep further downside and capitulation risks elevated.
