Why the Crypto Market Is Crashing Today – Here’s What’s Causing the Drop
Jakarta, Pintu News – October and November were not good months for the crypto market. During that period, the market experienced spikes in liquidation, high volatility, and even the price of Bitcoin briefly plummeted to $80,000. Many traders are hoping that December will bring a breath of fresh air and perhaps end with a strong year-end rally.
However, on the first day of December, the market turned red again. Today, the crypto market is down by 5.26% with the total market capitalization standing at $2.92 trillion.
Bitcoin itself fell 5.3% to $85,000, and other cryptocurrencies such as Ethereum , Solana , BNB , and XRP have also fallen more than 5% in the past 24 hours.
What the Crypto Market is Showing Right Now
Bitcoin’s price fell sharply to break below $90,000, which wiped out about $130 billion of the crypto market’s total capitalization in just two hours.
Read also: 3 Reasons Why This DeFi Subcategory Could Be the Leader in the Next Altcoin Season!
In the last 60 minutes alone, over $204 million worth of trading positions have been liquidated, mostly from long traders who were not prepared for this move.
Sharp spikes like this are becoming more frequent as liquidity in the market gets thinner, especially during evenings and weekends. When there is a small selling pressure amidst an empty order book, prices can fall excessively.
Analysts also emphasize that this drop is not due to fundamentals. This is a leverage-driven market, and Bitcoin’s $4,000 drop without any news is proof of that.
Since many traders are highly leveraged, even a small movement can trigger the liquidation of long positions in a row, which then leads to more selling pressure, and the cycle keeps repeating itself.
Leverage Liquidation Triggers First Wave of Declines
Over $609 million in leveraged positions were liquidated in the last 24 hours. Bitcoin alone accounted for $185 million of that total liquidation, and 85% of that came from long positions.
Open interest fell by 1.13%, signaling that traders are exiting the market rather than opening new positions. The average funding rate is still slightly positive, indicating that many traders are overly optimistic (bullish) despite the price of BTC falling below $86,000.
As soon as the $86,000 level was breached, stop-loss orders started triggering in rapid succession. With high leverage and little liquidity, the price chart fell sharply in no time.
Surge in Japanese Bond Yields Adds Pressure
Yields on 2-year Japanese government bonds rose above 1% for the first time since 2008. This strengthened the value of the yen and made investors more cautious towards risky assets. Many traders began to unload their carry trade positions – a strategy of borrowing cheap yen to buy Bitcoin and other crypto assets – which had previously fueled the crypto rally in early 2025.
But with Japanese bond yields rising, the carry trade strategy has become less attractive, and fund flows have begun to return to safer markets.
If the Bank of Japan signals further rate hikes, this pressure could continue until mid-December.
Read also: Bitcoin Price Slumped to $87,000 on December 1, 2025, Can BTC Recover?
Short-Term Bullish Structure Collapses
The total crypto market capitalization has now fallen below the $2.89 trillion Fibonacci swing low – a level that previously held for several weeks. A break below this level invalidates the short-term bullish structure. Traders are now eyeing the next support zone around $2.74 trillion, which was last seen in April 2025.
The RSI14 indicator on the total market chart shows a reading of around 36.86, which means there is still room for the market to drop further before it enters oversold territory. Sellers are still dominating around the 7-day moving average (SMA 7), and buyers are yet to show signs of coming back in.
What Will Happen Next?
This decline is seen more as a result of low liquidity and the use of high leverage, rather than a change in market fundamentals. Analysts emphasize that, “this is not a bear market, but a leveraged market.” When the order book is mostly passive and high leverage is widely used, sharp movements are natural.
If Bitcoin price can stabilize around $85,000 and open interest continues to decline, it is possible that the market will calm down in the next few days.
However, if selling pressure returns during low liquidity hours, the market could see another sharp drop. Currently, traders are eyeing the $83,000-$84,000 zone as the next important support level for Bitcoin.
To recover in December, the market needs:
- decreased use of leverage,
- stronger spot demand,
- and the return of liquidity.
Until those three things happen, volatility will still be the only certainty in the crypto market.
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*Disclaimer
This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.
Reference:
- Captain Altcoin. Here’s Why The Crypto Market Is Down Today As Bitcoin (BTC) Price Hits $85K. Accessed on December 1, 2025
