Level 1 — Absolute Beginner

Bitcoin fell a lot this weekend. On Sunday night, the price went down to about $73,761. That is the lowest price since August. On Monday morning, the price came back up to about $74,800.

People lose money when the price falls. In one day, more than $1 billion of crypto bets were closed. Most of these bets said that prices would go up. Ether, another coin, fell below $2,100.

Investors are worried about interest rates in the United States. More people have jobs now, so the central bank may make interest rates higher. Higher interest rates are bad news for risky things like crypto.

Other markets moved too. Gold went up. Oil went down. In Asia on Monday, share prices in Japan and Taiwan went up.

fell

Went down. The past form of 'fall'.

price

How much money you pay for something.

lowest

The smallest, or the most down, of all.

bets

Deals where you can win money or lose money.

lose money

To have less money than before.

interest rates

The price of borrowing money.

investors

People who put money into things to make more money.

risky

Not safe. You can lose money fast.

Level 2 — Elementary

Bitcoin slid to about $73,761 late on Sunday, its lowest level since August. It then recovered to around $74,800 in early European trading on Monday. The price went above $75,000 for a short time, but the bounce did not last.

More than $1 billion of crypto positions were liquidated in 24 hours, according to the data provider CoinGlass. Long positions, which are bets that prices will rise, made up $913 million of that total. Ether liquidations were $448 million and Bitcoin liquidations were $272 million. The biggest single order closed was worth $48 million.

Money is also leaving crypto funds. US spot Bitcoin exchange-traded funds lost about $412 million on Friday, almost all of it from BlackRock's IBIT fund. Bitcoin now trades below the average price that the company Strategy paid for its coins.

The main reason is interest rates. US employers added 165,000 jobs in October, far more than the 60,000 to 65,000 that economists expected, and unemployment fell to 4.1%. Traders now expect the Federal Reserve to raise rates in December instead of cutting them.

slid

Moved down, usually quickly. The past form of 'slide'.

recovered

Went back up after going down.

liquidated

Closed by force, because the trader lost too much money.

long positions

Bets that a price will go up.

data provider

A company that collects and sells information, such as market numbers.

exchange-traded funds

Funds you can buy and sell on a stock market, like a share.

average price

The middle price you get when you add prices together and divide them.

raise rates

To make interest rates higher.

Level 3 — Intermediate

A sharp selloff in risk assets ran through the weekend and spilled into Monday, and crypto took most of the damage. Bitcoin slipped to roughly $73,761 late on Sunday, its lowest level since August, before clawing back to about $74,800 in early European trading on Monday. It briefly pushed above $75,000 again, but the bounce stalled. Ether fell below $2,100 before recovering to around $2,140, and it is down roughly 7.4% over the week. Traders are now watching resistance near $77,430, the 100-day average, and support near $73,150, the 200-day average.

The mechanics matter as much as the headline price. More than $1 billion of crypto positions were liquidated in 24 hours, according to the data provider CoinGlass, and long positions, meaning bets that prices would rise, accounted for $913 million of that figure. Ether liquidations reached $448 million and Bitcoin liquidations $272 million, while the largest single order closed out was a $48 million ether trade. Saxo Bank described the slide as a leverage flush rather than a reaction to any fresh piece of news, and another explanation is simply timing: bad weekend headlines landed while stock markets were shut, leaving crypto as the only big market open to react. Money has been leaving crypto funds too. US spot Bitcoin exchange-traded funds shed about $412 million on Friday, almost all of it through BlackRock's IBIT fund, and on Nov 5 US spot Bitcoin and Ethereum ETFs together recorded net outflows of $530.1 million. Solana dropped below $86 on fund outflows of its own.

Behind all of this sits a change of view about US interest rates. US nonfarm payrolls rose by 165,000 in October, far above forecasts of roughly 60,000 to 65,000, unemployment fell to 4.1% from 4.2%, and average hourly earnings rose 0.4%. Federal Reserve officials John Williams, Alberto Musalem and Mary Daly have all backed further rate increases, and markets now put the probability of a rise at the Dec 8-9 meeting at close to 80%, which would lift the target range above the current 3.75% to 4.00%. Equities, however, have not simply collapsed. The Nasdaq 100 rose 1.4% on Friday even though the index fell nearly 5% last week, its fourth straight weekly loss, and the VIX, Wall Street's fear index, which tracks expected volatility, fell 9% to 25.64. Brent crude traded 1.5% lower at $96.80 a barrel after a 16% weekly drop, while gold rose 1.25% to $4,122 an ounce.

Politics is part of the story as well. Democrats won both chambers of Congress on Nov 3, a result Saxo Bank links to investor concern about tighter AI regulation and slower data centre investment, while other analysts point instead to the prospect of stricter crypto rules, after an industry that spent more than $300 million backing friendly candidates. Attention now turns to US October consumer price index data and Chinese trade figures on Tuesday, to speeches by Fed officials Austan Goolsbee at 15:00 GMT and Tom Barkin at 17:15 GMT on Monday, and to results from the AI cloud company CoreWeave on Tuesday. This article reports what happened and what analysts are saying, and is not financial advice.

Level 4 — Advanced

The weekend's damage was concentrated precisely where leverage was heaviest. Bitcoin slid to roughly $73,761 late on Sunday, its weakest level since August, before steadying near $74,800 in early European trading on Monday, with one snapshot shortly after 05:00 CET showing it a fraction higher on the day and another, taken later, down about 1.4% over 24 hours. Ether's dip below $2,100 did more damage still: of the more than $1 billion of positions liquidated in 24 hours, CoinGlass data show $448 million came from ether against $272 million in Bitcoin, with long bets accounting for $913 million of the total and the single largest closed order a $48 million ether trade. That distribution is the signature of a liquidation cascade rather than an orderly repricing. Saxo Bank called the move a leverage flush, and the episode looked less like fresh bad news and more like forced deleveraging by traders who had nowhere to hedge while equity markets were shut.

Friday's session in New York had, in fact, been constructive beneath the surface. The S&P 500 added 0.3% to 7,376.86 and the Nasdaq 100 climbed 1.4% to 26,989.99 as semiconductor stocks rebounded 4.2%, led by AMD up 11.0% and Nvidia up 2.8%, while Airbnb gained 11.7%; only the Dow Jones dissented, falling 0.5% to 51,285.73. Even so, the Nasdaq shed nearly 5% over the week, a fourth consecutive weekly loss, and Europe closed softer, with the Stoxx 600 down 1% at 648.33, the DAX off 1.9% and the FTSE 100 down 1%. Asia then rallied on Monday: Japan's Nikkei 225 gained around 2.5% in afternoon trading, Taiwan's Taiex advanced 5% as TSMC rose 5.6% and Tokyo Electron nearly 3%, and South Korea's Kospi recovered. Risk appetite, in other words, has not disappeared so much as rotated away from the most leveraged corners of the market.

What has genuinely changed is the expected path of policy. October nonfarm payrolls rose by 165,000 against forecasts nearer 60,000 to 65,000, unemployment slipped to 4.1% from 4.2% and average hourly earnings rose 0.4%, a combination that leaves little room for the cuts investors had penciled in. Three Federal Reserve officials, John Williams, Alberto Musalem and Mary Daly, have since backed further increases, and markets now price in a probability close to 80% of a hike at the Dec 8-9 meeting, which would carry the target range beyond the current 3.75% to 4.00%. The turn is unambiguously hawkish, and the bond market has followed: the two-year Treasury yield closed at 4.51% and the ten-year sat near 4.86%, with the euro around $1.1165 and the dollar near 158.22 Japanese yen. The US bond market is shut on Wednesday for Veterans Day, thinning liquidity around Tuesday's consumer price index release.

Commodities told a parallel story of positioning unwinding rather than demand collapsing. Brent crude traded 1.5% lower at $96.80 a barrel after a near 16% weekly fall, its steepest since the start of the coronavirus pandemic and a startling reversal from the six-month high reached at the end of October, while gold rose 1.25% to $4,122 an ounce, silver 1.6% to $52.75 and copper 1.5% to $6.33 a pound. Gold's role as a safe haven was reinforced by official buying, with central banks taking 321 tonnes in the third quarter according to the World Gold Council. Crypto's difficulties are not purely macroeconomic either: the Oct 29 attack on Binance cost about $6.34 billion and was blamed by the FBI on hackers linked to North Korea, Solana slipped below $86 on fund outflows, and Bitcoin now trades beneath the cost basis of Strategy, the corporate holder formerly known as MicroStrategy. Equity investors drew finer distinctions, sending Iren up about 20% after its AI cloud revenue nearly tripled, lifting Cipher and Riot, and leaving Coinbase lower. Tuesday brings US CPI and Chinese trade data along with results from CoreWeave, while Austan Goolsbee speaks at 15:00 GMT on Monday and Tom Barkin at 17:15 GMT. This is a report of what happened and what analysts are saying, not financial advice.