Bitcoin briefly plunged below $87,000, wiping out a week’s gains in one session.
The fast selloff triggered $400 million in liquidations within just 60 minutes and pushed the global crypto market capitalization down 4% to $3.04 trillion. Trading activity surged as both retail and institutional investors reacted swiftly to price pressure.
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Market Turmoil Sparks Massive Liquidations
Liquidations surged across leveraged positions, reflecting the speed of the downturn. Market data noted $400 million liquidated in just one hour. This rapid wave of losses highlights the risks for traders during sharp price moves.
Trading volume spiked to over $110 billion as investors adjusted their holdings. Bitcoin’s dominance stood at 57.1%, while Ethereum held 11.3%, according to CoinGecko data.
The Kobeissi Letter attributed the crash to thin weekend liquidity and record-high leverage, saying, “This crypto bear market is still structural in nature. We do NOT view this as a fundamental decline.” The analyst noted that Bitcoin fell $4,000 in minutes with no news. This triggered a domino-effect selloff amplified by mass liquidations of leveraged positions.
Other analysts have warned that Bitcoin’s price pattern resembles earlier bearish cycles. Following a recovery above $90,000 after a drop on November 20, Bitcoin hovered around $91,208.85 on November 28 and maintained support at $90,000 for six days.
Korbot Labs describes that the current price action echoes April 2024, when Bitcoin bounced back above $70,000 only to drop to $57,000 by May and later to $67,000 by June. This pattern suggests that further sideways movement or another correction is possible.
Another analyst cautioned about the risk of deeper losses, noting that a “wipe out” could occur if Bitcoin falls through the $80,000 support level.
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Technical analysis also points to crucial support zones. Should selling persist, prices could slip much further. A drop to $48,000 would mark a dramatic 45% decline from current levels, but such a move would likely require sustained bearish sentiment.
Asset Rotation Narrative Shapes Sentiment
Some analysts see Bitcoin’s selloff as part of a broader shift in asset allocation. The move came as traditional safe-haven assets like precious metals outperformed. This suggests some investors are reconsidering their risk exposure.
Source: silverprice.orgThis argument states that capital is flowing from digital assets to “hard money” alternatives. Silver, for example, surged even as Bitcoin fell. Some analysts see this as a sign of changing investor preferences.
This theory remains hotly debated. Bitcoin has repeatedly rebounded from steep selloffs. Its 57.1% market dominance shows it still attracts most digital asset flows, despite volatility.
Meanwhile, on the first day of December, Bitcoin briefly dipped below $87,000 before quickly recovering. At the time of writing, Bitcoin is trading in the $87,200–$87,400 range, with market participants closely watching whether the $87,000 support level will hold.
Source: https://beincrypto.com/bitcoin-drops-89k-market-selloff-liquidations/
