Bitcoin plunged below $86,000 on Monday as a widespread selloff rocked cryptocurrency markets, with more than $600 million in leveraged positions liquidated and the total crypto market capitalization sliding to $3 trillion.
The world’s largest cryptocurrency fell as much as 6% to $85,778 during early Asian trading hours, while Ethereum tumbled more than 6% to below $2,900. Other major tokens faced similar pressure, with Solana dropping nearly 8%, Dogecoin declining 8.4%, and XRP sliding 7%.
Multiple Headwinds Pressure Markets
The sharp decline follows a challenging November that saw Bitcoin lose 17.5% of its value, its worst monthly performance since March. Contributing to the selloff, China’s central bank on November 28 reaffirmed its cryptocurrency ban and warned that stablecoins pose risks for money laundering and illegal cross-border transfers. The statement from the People’s Bank of China added pressure to Hong Kong-listed companies tied to digital assets, which declined during Monday’s trading session.
Market sentiment also soured following a security breach at decentralized finance platform Yearn Finance, where attackers exploited a vulnerability to drain approximately $3 million worth of Ethereum , which was then laundered through Tornado Cash. The incident underscored ongoing security concerns in the crypto ecosystem.
Institutional demand has weakened considerably, with U.S. spot Bitcoin exchange-traded funds recording $3.5 billion in outflows during November, matching near-record redemptions. “The biggest concern is the meagre inflows into Bitcoin exchange-traded funds and absence of dip buyers,” said Sean McNulty, APAC derivatives trading lead at FalconX.
Fed Decision Awaited
The selloff comes ahead of the Federal Reserve’s December 9-10 meeting, where markets are pricing in an 85% probability of a 25 basis-point interest rate cut. However, persistent inflation concerns and uncertainty about the Fed’s 2026 trajectory have contributed to risk-off sentiment across financial markets.
“We are watching $80,000 on Bitcoin as the next key support level,” McNulty added. The sharp price movements triggered cascading liquidations, with over $542 million in long positions wiped out as traders betting on a rebound were caught off guard.