Published: December 1, 2025
Bitcoin kicked off December with another violent lurch lower, extending a painful autumn selloff that has already erased hundreds of billions of dollars from the crypto market.
In early Monday trading, BTC fell around 5–6% over 24 hours, briefly slipping into the mid‑$85,000 range after having hovered near $91,000 just a day earlier. Ether, Solana, BNB, XRP and other majors dropped 5–8% in sympathy as total crypto market value slid to roughly $3.0–3.1 trillion. Bloomberg
The slump capped a bruising November in which Bitcoin lost more than 20%, is now down roughly a third from its October all‑time high near $126,000, and has helped wipe out around $1–1.2 trillion from digital asset valuations in just six weeks. The Economic Times
Key takeaways
- Bitcoin slid below ~$86,000 on December 1, dropping about 5–6% in 24 hours as crypto markets resumed a steep multi‑week selloff. Bloomberg
- A weekend “Sunday slam” cleared hundreds of millions in leveraged longs, with thin liquidity turning a sharp but ordinary dip into a cascade of liquidations. Hindustan Times
- A major DeFi exploit, weak ETF inflows and mounting macro worries—from higher-for-longer rates to tariff talk and tech-stock losses—have all piled onto sentiment. mint
- Analysts say this downturn is structurally different from 2018 or 2022, with slower adoption, a heavy institutional footprint via ETFs and “Bitcoin treasury” companies, and thinner liquidity. Business Insider Africa
- Key levels now in focus include ~$87,000 support and the psychologically important $80,000 zone. A decisive break, some warn, could open room toward the mid‑$70,000s, while a dovish Fed later this month could fuel a relief rally. crypto.news
1. What just happened to Bitcoin?
The latest leg of the decline has unfolded in two waves:
- The weekend “Sunday slam” – Late Sunday and into early Monday (UTC), traders watched a sudden flash crash across major coins. Bitcoin dropped several thousand dollars in minutes; Ether, Dogecoin and others saw similarly steep red candles. Social feeds filled with screenshots and posts asking, “Why is Bitcoin down today?” Hindustan Times Derivatives data showed that roughly $400–600 million worth of leveraged positions were liquidated in a very short window, the vast majority of them bullish longs. Hindustan Times
- Monday’s Asia–Europe follow‑through – When traditional markets opened in Asia on December 1, Bitcoin sank further, sliding more than 5% intraday to the mid‑$85,000–$87,000 band. Ether dropped about 6% toward $2,800, while Solana and other high‑beta tokens fell 7% or more. Bloomberg
Crypto‑wide, market cap fell about 5% to roughly $3.04 trillion, with on‑chain analytics firms logging more than $600 million in positions wiped out over the day and fear gauges sliding back into “extreme fear.” Crypto
For traders, the message is clear: volatility is back, and it’s being amplified by leverage, thin liquidity and nerves around macro policy.
2. The short‑term triggers: leverage, a DeFi hack and weekend liquidity
a) Forced liquidations and “cascades”
This downturn didn’t start from a single headline. Instead, it grew out of fragile positioning:
- Since early October, crypto markets have been digesting a record one‑day wipeout of around $19 billion in leveraged bets that hit just after Bitcoin set its ~$126,000 peak. The Business Times
- As prices slid through key support levels in November, traders piled into high‑leverage long positions, betting on a quick rebound. When those levels failed again this weekend, margin calls and automatic liquidations created a self‑reinforcing selloff, with forced selling begetting more forced selling. Coinpedia Fintech News
Analytics from derivatives trackers show longs made up the majority of the $600M+ in liquidations on December 1, underscoring how much of the move was mechanically driven rather than by fresh bearish news. Crypto
b) A Yearn Finance DeFi exploit
Sentiment was already brittle when a significant exploit hit Yearn Finance’s yETH pool, with hackers draining roughly 1,000 ETH via Tornado Cash. Coinpedia Fintech News
Coverage from Coinpedia and others ties about $144 billion in lost crypto market capitalization over the latest downswing to a mix of this DeFi security scare and an ongoing wave of long‑position deleveraging. Coinpedia Fintech News
Even though the direct loss was modest relative to Bitcoin’s size, the hack:
- Re‑ignited worries about DeFi smart‑contract risk.
- Added stress to a market already nervous about liquidity.
- Pushed some traders to yank funds from interconnected DeFi pools, tightening liquidity exactly when it was needed most. Coinpedia Fintech News
c) Weekend liquidity and the “thin order book” problem
Several December 1 round‑ups highlight a familiar pattern: big moves in thin weekend books. Crypto
- Trading volumes drop late Sunday and early Monday in many regions.
- With fewer resting bids, even a modest sell order can punch through the order book, dragging price sharply lower.
- Once price pushes into popular leverage levels, automatic liquidations snowball the decline.
This structure is why we periodically see “Sunday slams”: structural fragility, not necessarily a dramatic new fundamental shock. Crypto
3. Weeks in the making: from October euphoria to November’s crash
The December 1 tumble is the latest chapter in a multi‑week correction:
- Bitcoin hit a record high around $126,000 in early October on the back of spot ETF enthusiasm and a narrative linking BTC to the AI boom. The Business Times
- A brutal one‑day crash later that month wiped out about $19B in leveraged positions, shattering confidence and thinning order books. The Business Times
- Through November, BTC fell roughly 21–30% from its peak, making it the worst month since mid‑2022, according to analyses from Livemint and Deutsche Bank that frame the move as a full‑blown “crypto winter scare.” mint
- Reuters estimates that around $1.2 trillion has been erased from the value of all cryptocurrencies in the last six weeks, while Economic Times pegs total losses at “over $1 trillion” as altcoins tumbled even harder. Reuters
By late November, Bitcoin had already briefly dipped below $90,000, triggering talk of a “death cross” on technical charts and raising fears that the critical $88,000–$90,000 area could give way to a deeper slide. The Economic Times
Last week’s modest rebound back above $90,000 turned out to be a dead‑cat bounce, setting up the fresh breakdown we’re now seeing as December begins. The Business Times
4. Why this Bitcoin crash looks different from 2018 or 2022
Deutsche Bank analysts, among others, argue that this downturn is structurally different from the largely retail‑driven busts of 2018 and 2022. Business Insider Africa
a) Adoption is slowing, not surging
In previous cycles, deep drawdowns came after explosive growth in user adoption. This time, crypto usage among retail traders has actually slipped, from about 17% this summer to roughly 15% now, according to DB estimates. Business Insider Africa
The bank reprises its so‑called “Tinkerbell effect” thesis: Bitcoin’s valuation depends heavily on belief‑driven adoption. When that belief plateaus or fades, price becomes more vulnerable to macro and liquidity shocks.
b) ETF and institutional flows cut both ways
Spot Bitcoin ETFs, approved in early 2024, helped fuel a roughly 600% rally into this year’s highs. But this is the first 30%+ correction since those funds launched, and the new structure is amplifying downside risk: Business Insider Africa
- ETF inflows have slowed sharply and, in some products, turned to outflows.
- Analysts estimate $80,000 is roughly the average entry level for ETF‑held BTC, making that zone psychologically and mechanically important. A sustained break below it could pressure ETF issuers and institutional holders to rebalance. Reuters
- ETF investors tend to be more rate‑sensitive and quick to de‑risk than the hardcore retail HODLer base of prior cycles.
Deutsche Bank notes that institutionalization has deepened the linkage between Bitcoin and macro risk: today’s selloff is happening in a world of higher rates, stricter regulation and actively managed crypto treasuries, not the lightly regulated, mostly retail ecosystem of 2017–2018. Business Insider Africa
c) Corporate “Bitcoin treasuries” under pressure
A cluster of listed companies — often called “crypto treasury” firms — spent the bull run loading their balance sheets with Bitcoin. Standard Chartered estimates that such companies, along with ETFs, now control about 4% of all BTC in circulation and over 3% of ETH. Reuters
Reuters and investor‑focused outlets highlight several new stress points: The Straits Times
- Strategy Inc (MSTR), one of the largest corporate Bitcoin holders, controls roughly $56 billion worth of BTC and has seen its mNAV (enterprise value vs. Bitcoin holdings) slide to around 1.19.
- CEO Phong Le has said the company could sell some Bitcoin — as a “last resort” — if its mNAV falls below 1 and it needs to fund dividend obligations or can’t raise new capital. Even though he stressed this is not the base case, markets took note. Investors.com
- Strategy’s stock has already dropped more than 60% from recent peaks, with banks warning it could be removed from major equity indices, forcing index‑tracking funds to sell. Reuters
- Other corporate holders like Japan’s Metaplanet and U.S.-listed miners have also plunged, reinforcing the sense that crypto and traditional equity markets are now tightly coupled. Reuters
Together, these factors create a pro‑cyclical loop: falling Bitcoin prices hurt corporate treasuries and ETFs, which may eventually need to sell, which in turn adds more pressure to BTC.
d) Stablecoins and systemic jitters
As if that weren’t enough, S&P Global recently cut its assessment of the world’s largest stablecoin, USDT, to its weakest stability rating, warning that a severe drop in Bitcoin could leave some of its reserves under‑collateralized. The Straits Times
That downgrade has sharpened questions about how a prolonged BTC slump might ripple into stablecoins and DeFi, adding yet another layer of risk to an already stressed ecosystem.
5. Macro headwinds: higher rates, tariffs and tech turbulence
Bitcoin’s slide isn’t happening in isolation. Across multiple analyses, one theme keeps coming up: this is a risk‑off move hitting everything from AI stocks to crypto. Coinpedia Fintech News
a) Higher‑for‑longer rates and the Fed
Data through November showed:
- Persistent inflation
- Firm job growth
- Resilient consumer spending
Together, those numbers have reduced expectations for aggressive Federal Reserve rate cuts, keeping bond yields elevated and draining appetite for high‑beta assets like Bitcoin. The Economic Times
Markets are now fixated on the December 10 Fed meeting, where policymakers will update their economic projections and rate path. Crypto commentators note that: Crypto
- A softer tone could ease pressure on BTC, potentially allowing a climb back toward the $95,000–$105,000 region.
- A hawkish surprise could reinforce the current downtrend and re‑open the path toward the low‑$80,000s or even the $70,000s.
Adding to the uncertainty, President Donald Trump has signaled he will nominate a new Fed chair with a strong preference for lower rates, injecting a degree of political drama into an already delicate rate‑cut debate. Hindustan Times
b) Tech stocks, AI valuations and global risk sentiment
Reuters and other outlets describe the current selloff as part of a broader flight from richly valued tech and AI names. As investors question stretched valuations in growth stocks, assets that trade like “high‑beta tech” — including Bitcoin — have come under additional pressure. Reuters
Livemint analysts explicitly link Bitcoin’s recent slump to: mint
- Concern over “inflated” AI company valuations
- Ongoing trade tensions and tariff threats
- A general “risk‑off” tone in global markets
c) Global regulatory and policy noise
From China’s central bank reiterating crackdowns on crypto activity to new tax proposals in parts of Europe and rising rates in Japan that are unwinding popular “carry trades,” policymakers are playing a bigger role in shaping risk appetite. Reuters
For Bitcoin, that means more sensitivity to policy headlines than in earlier cycles when regulation was lighter and institutional participation smaller.
6. Key levels and scenarios traders are watching
With Bitcoin oscillating around the mid‑$80,000s, markets are intensely focused on a handful of price zones highlighted across research notes and news coverage:
- ~$87,000 support: Coinpedia and multiple trading desks flag this area as a near‑term “line in the sand.” Holding here could stabilize sentiment; a clean break might invite a test of lower supports. Coinpedia Fintech News
- $82,000–$82,500 region: Several analyses point out that this band is close to where many recent long‑term buyers stepped in. A decisive move below it would signal that even relatively patient holders are under water. mint
- The $80,000 mark: Reuters and Bloomberg highlight $80k as crucial because it roughly coincides with average ETF and treasury entry levels. Breaking this zone could force risk managers at ETFs and corporate treasuries to rethink their exposure. The Edge Singapore
- $75,000–$78,000 deeper support: Economic Times lays out a scenario where, if $88k–$90k gives way and macro data stay hostile, BTC could drift into this range before longer‑term buyers become active. The Economic Times
On the upside, multiple pieces suggest that a dovish Fed pivot or renewed ETF inflows could see Bitcoin:
- First reclaim $92,000–$95,000, stabilizing above broken supports;
- Then attempt a push back toward the $100,000–$105,000 psychological zone later in December or into early 2026, if risk sentiment improves. The Economic Times
These are scenarios, not certainties. Past cycles have shown that Bitcoin can overshoot both downside and upside targets when emotions and leverage run hot.
7. What it means for crypto investors (and what to watch next)
News coverage across outlets shares a few common themes for anyone exposed to crypto right now:
- Volatility is back to “crypto‑classic” levels.
Moves of 5–10% in a day, even for large‑cap assets like BTC and ETH, are once again normal rather than exceptional. Crypto - Leverage cuts both ways.
The latest crash has been driven less by new fundamental shocks and more by overextended leverage meeting thin liquidity. That makes position sizing, stop‑loss discipline and understanding derivatives exposure more important than ever. - Macro is in the driver’s seat.
Bitcoin is trading much more like a global macro asset — reacting to yields, central bank signals and tech‑stock sentiment — than the isolationist “digital gold” narrative sometimes implies. The Economic Times - Structural shifts may slow any recovery.
Slower adoption, ETF outflows, and stressed corporate treasuries mean this drawdown may take longer to repair than prior episodes that were mostly about retail bubbles and rapid reflation. Business Insider Africa - Policy decisions in the next two weeks are critical.
Markets are watching:- The December 10 Federal Reserve meeting,
- Incoming U.S. economic data,
- Any new regulatory headlines around stablecoins, ETFs and DeFi. Reuters
For individual investors, all of this underlines that crypto remains a high‑risk asset class. This article is for information only and is not investment advice. Anyone considering entering or exiting positions should carefully evaluate their own risk tolerance, time horizon and need for professional financial guidance.
8. FAQ: Why is Bitcoin down today?
Why is Bitcoin crashing right now?
Because several forces hit at once: heavy leverage, a weekend DeFi hack, thin liquidity, weak ETF inflows, concern about corporate BTC treasuries, and a broader risk‑off shift driven by higher‑for‑longer interest rate expectations. The Economic Times
How much value has the crypto market lost?
Estimates vary, but recent analyses suggest over $1 trillion — and as much as $1.2 trillion — has been wiped from the total crypto market cap in the last six weeks. Reuters
Is this another “crypto winter”?
Some strategists frame the current move as a potential new crypto winter; others see a deep but still “normal” drawdown after a massive bull run, noting past cycles have seen 70–80% peak‑to‑trough declines. Whether this becomes a prolonged winter will likely depend on macro policy, ETF flows and whether key levels like $80,000 hold. mint
Could Bitcoin recover from here?
Historically, Bitcoin has rebounded from severe drawdowns, but speed and magnitude vary widely. Some analysts think a dovish Fed and renewed inflows could see prices revisit the $95,000–$100,000 range in coming months; others warn that a break of key supports could open room toward $75,000 or lower. None of these scenarios are guaranteed. Business Insider
