Bitcoin experienced a significant decline on December 1, 2025, dropping below the key level of $87,000 and contributing to an overall loss of $144 billion in the cryptocurrency market. The price of Bitcoin fell sharply from approximately $91,300 to nearly $87,000 in just a few hours, triggering widespread panic among traders.
The downturn in the cryptocurrency market was driven by multiple factors, including ongoing inflation concerns, discussions surrounding tariffs, and sustained outflows from Bitcoin exchange-traded funds (ETFs). The situation worsened when Yearn Finance reported a major security breach, where hackers drained its yETH pool and funneled 1,000 ETH through Tornado Cash. This incident heightened existing fears regarding the security of decentralized finance (DeFi) platforms, prompting additional selling pressure as traders worried about potential panic withdrawals elsewhere.
While the DeFi hack acted as a catalyst for the decline, it was not the sole reason behind the market’s downturn. Since mid-November, the cryptocurrency market has been undergoing significant deleveraging, eliminating billions of dollars in long positions. This situation has left Bitcoin particularly vulnerable to even minor sell-offs. Analyst Ash Crypto noted that Bitcoin’s recent drop wiped out over $210 billion from the market and liquidated nearly $700 million in leveraged positions, despite the absence of any major negative news. He characterized the event as a “pure manipulation dump,” suggesting it was a tactic to flush out leveraged traders.
Market Dynamics and Weekend Liquidity Issues
The liquidity in the cryptocurrency market during weekends tends to be thin, which exacerbates the impact of sudden sell-offs. With fewer active buyers and sellers, any abrupt wave of selling can severely affect prices. This situation, combined with record-high leverage on exchanges, has led to a series of cascading liquidations, creating a domino effect that accelerates market declines. This recent volatility reflects structural weaknesses in the market rather than a fundamental decline in Bitcoin’s value.
The Federal Reserve recently concluded its 30-month liquidity drainage campaign, halting Quantitative Tightening after removing over $2 trillion from the financial system. Anticipation of a potential rate cut in December could inject liquidity back into the markets, potentially easing pressure on risk assets, including cryptocurrencies.
Future Projections for Bitcoin
Currently, Bitcoin is hovering near the crucial support level of $87,000. Analysts suggest that maintaining this support could stabilize the market. However, if Bitcoin falls below this threshold, it may drop to around $80,400 and could even approach $75,000 if fears persist. Conversely, a Federal Reserve rate cut could ignite a rebound, pushing Bitcoin back toward the $95,000 to $100,000 range in the upcoming weeks.
As the cryptocurrency market continues to evolve, staying informed about developments is essential. Expert analysis and real-time updates remain crucial for navigating the ever-changing landscape of Bitcoin and other digital assets.
