Under the optimistic expectation of interest rate cuts, the crypto assets market has clearly stabilized, with a market capitalization rise of 1.5% to $2.98 trillion. However, the brief rebound does not mean that the challenges in the crypto market have been resolved. Analysts point out that the decline this month has exposed three core issues faced by Bitcoin.

1. The outflow of funds from Bitcoin ETF has intensified.
Markus Thielen, the founder and CEO of 10X Research, stated that outflows from Bitcoin exchange-traded funds (ETFs) in November have reached $3.5 billion, the largest since February this year. He pointed out, "This indicates that institutional investors have stopped allocating to Bitcoin, and these ETFs have turned into sellers. As long as they continue to sell off, the market will struggle to maintain a rebound or rise."
2. The minting of stablecoins has slowed down, and capital outflow has intensified.
Thielen also pointed out that the minting activity of stablecoins has slowed, which may indicate a decrease in funds entering the crypto market. According to its data, about 800 million dollars flowed back from crypto assets to fiat currency last week. Although this is not a large scale, it further shows that funds are not staying in the market. Stablecoins are a type of crypto asset that is pegged to the price of other assets (usually the US dollar) and provide a hedging function during market fluctuations. After the historic crash of the crypto market last month, the market capitalization of stablecoins once rose. However, according to DeFiLlama data, as of November 1st, the total market capitalization of stablecoins has decreased by 4.6 billion dollars. Thielen said, "Funds are not only not entering the market, but are also continuously flowing out. This is also the reason why the market share of Bitcoin has not been able to increase."
3. The selling pressure from long-term holders remains.
The third challenge is that long-term holders have started selling during the decline, possibly anticipating Bitcoin's historical four-year cycle. The performance of Bitcoin from peak to trough is often closely related to the halving event that occurs every four years. However, many investors are now skeptical about whether this trajectory will repeat. Nicolai Sondergaard, a research analyst at blockchain analytics firm Nansen, stated: "In every cycle, old players will sell. I think at some point they will feel, 'Maybe I am old enough now, and it’s time to use this money to do something else.'"