The cryptocurrency market experienced a sharp and volatile sell-off on Monday, driven by broad risk-off sentiment that saw the total market capitalisation plummet by an estimated $140 billion in a matter of hours.
Bitcoin (BTC), the world’s largest digital asset, bore the brunt of the panic, plunging nearly 6% in 24 hours to trade at its lowest level in recent sessions, settling below the critical $86,000 mark. At one point, Bitcoin was seen trading near $85,778.
Altcoins suffer steepest drops
The downturn extended across major altcoins, with Ethereum (ETH) falling approximately 5.85% to trade around $2,814. Other prominent tokens, including Cardano (ADA), XRP, BNB, and Solana, experienced even steeper losses, sliding over 10% as the market-wide sell-off intensified.
According to data from CoinMarketCap, the global crypto market capitalisation dropped by 4.82% to $2.94 trillion. The aggressive downturn was characterised by heavy liquidations, which saw over $300 million in leveraged long positions wiped out, reflecting panic and high leverage among traders.
Macroeconomic headwinds and liquidity flushes
Analysts attribute the steep slide to several macroeconomic and technical factors. The drop is being interpreted as a continued leverage flush-out coming from previous volatility, especially a record liquidation event that occurred in early October. Additionally, comments from the CoinDCX Research Team indicated that “the bears are back in action,” noting that macro uncertainty and the recent reaffirmation of China’s crypto ban, alongside warnings of intensified crackdowns on stablecoins, are contributing to the negative sentiment.
Experts suggest the break below key technical support levels has shifted the short-term outlook toward further downside, with the potential for Bitcoin to retest lower levels if the selling momentum persists. However, some market observers remain cautiously optimistic, viewing the event as a necessary deleveraging that could stabilise the market once the excess leverage is cleared.
November’s brutal decline continues
The current drop continues a period of sustained weakness for the digital asset class. Bitcoin had already lost 16.7% of its value throughout November. This recent plunge below the $86,000 level is structurally being viewed less as a fundamental breakdown and more as a “leverage flush-out,” meaning the market is primarily shedding over-leveraged traders. The next key psychological and technical support levels for Bitcoin are now positioned near $85,500 and $82,000.
