Bitcoin, Ethereum lead the decline

Bitcoin fell below $86,500, dropping 4.63% in 24 hours, while Ethereum sank over 5% to $2,830. XRP, Binance Coin and other large-cap assets also slipped sharply, deepening the market’s 30-day downtrend.

With volatility returning to the forefront, investors are asking one question: Why is crypto down today?

Top Reasons Why Crypto Is Down Today

1. Heavy leveraged liquidations

One of the biggest triggers behind today’s fall is the unwinding of highly leveraged positions.

• Over $16 million in Bitcoin long positions were liquidated in a single day.

• Previous liquidations in October wiped out nearly $19 billion of levered bets after Bitcoin hit an all-time high.

As these long positions are force-sold, prices drop sharply, creating a chain reaction across the market.

2. Bitcoin breaks critical support levels

Bitcoin slipped below key technical supports:

• $90,954 support zone

• $87,000 Fibonacci levels

Losing these levels accelerates selling pressure as traders cut losses or exit positions. Market participants are now watching whether Bitcoin will retest $80,659, its October low.

3. Risk-off sentiment hits global markets

Sean McNulty, APAC derivatives trading lead at FalconX, described today as a “risk-off start to December.”

Low inflows into Bitcoin ETFs and an absence of dip buyers are adding pressure. With investors turning cautious:

• Safe-haven assets see inflows

• Crypto sees outflows

• Liquidity thins, making price swings sharper

4. Macroeconomic fears intensify

Broader macroeconomic concerns amplified the selloff.

• Fears of a Bank of Japan rate hike

• Japanese government bond yields hitting a 15-year high

• Volatile Asian market sentiment impacting global risk assets

As global markets turn cautious, crypto—already a high-risk domain—feels the heat immediately.

5. Weekend low liquidity worsened the move

The drop occurred early Sunday–Monday when liquidity is naturally weaker.

Low liquidity amplifies every sell order, causing:

• Faster declines

• Longer red candles

• Higher volatility

This is why major cryptos fell within minutes, triggering panic across social media.

6. Investor sentiment turns negative

The decline has pushed trader mood firmly into “fear mode,” with many still recovering from the recent 20% monthly drop.

Posts on X (Twitter) reflected real-time panic:

• “What is Bitcoin down today?”

• “Crypto is going to zero rn.”

• “$400 million longs liquidated in minutes.”

Negative sentiment accelerates selling and keeps buyers cautious.

Is this the start of a deeper crash?

Analysts remain divided. While some see this as a healthy correction, others warn that if Bitcoin breaks below $80,000, a larger selloff could follow.

For now, the market remains volatile, and traders are watching:

• ETF inflow trends

• U.S. economic data for 2026

• Federal Reserve rate expectations

• Asian market reactions

• High-yield bond movements

According to data from The Block, US-listed spot Bitcoin ETFs recorded $129 million in net inflows on November 25, reversing a trend of continuous outflows that had pushed BTC to multi-month lows. Ethereum and Solana ETFs also posted $79 million and $58 million in inflows, indicating a selective rotation into liquid altcoins.

Analysts say the renewed ETF demand is encouraging but not yet strong enough to mark a decisive trend shift.

Timothy Misir, head of research at BRN, said the inflows offered the market “its first meaningful bid in days,” helping Bitcoin defend the $84,000–$90,000 accumulation band.

“Flows have become supportive but not yet decisive,” Misir noted, adding that on-chain stress remains elevated, with almost one-third of Bitcoin supply still underwater. He highlighted that long-term holders and institutions continue to accumulate, while most sellers are short-term participants reacting to recent volatility.

Misir also said mixed macro indicators — including a US Producer Price Index reading that met expectations — kept uncertainty around the Federal Reserve’s next move.

“Inflation data neither obliges the Fed to rush cuts nor stay rigid. Markets must price two-way outcomes this week,” he added.

Gabe Selby, head of research at Kraken-owned CF Benchmarks, said the market is witnessing Bitcoin’s “first real institutional stress test,” as ETF infrastructure amplifies both access and price discovery during downturns.

“November 2025 is tracking as the worst month ever for ETF flows,” Selby said. “But we see this as more profit-taking than panic selling. Bitcoin jumped from about $60,000 last November to nearly $126,000 earlier this year. Some investors are exiting — others, including major institutions, are doing the opposite.”

With ETF flows stabilising and long-term holders signalling confidence, analysts say Bitcoin may be forming a base — but upward momentum will depend on whether inflows can sustain in the days ahead.