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The cryptocurrency market was hammered on Monday as a renewed and ferocious sell-off erased more than $150 billion in market value within hours, sending Bitcoin and major altcoins into a steep downward spiral. The crash intensified a weeks-long slump that has rattled traders worldwide and rekindled fears of deeper instability ahead.
Early in Asian trading, Bitcoin plunged 4.3% to below $88,000, while Ether sank 6% under $2,900, according to Bloomberg data. Market-wide, total crypto capitalization dropped over 5%, marking one of the steepest single-session declines since September. ShareCafe described the sudden slump as an “abrupt downturn” driven by macroeconomic shocks and leveraged trading risks.
The move came on the heels of a fragile rebound last week, when Bitcoin briefly reclaimed the $90,000 level after October’s violent liquidation event that wiped out nearly $19 billion in leveraged positions. But Monday’s rout confirmed that market sentiment remains fragile.
The U.S. Federal Reserve’s November minutes signaled fewer rate cuts in 2026 than previously expected, killing hopes of a dovish pivot. The shift sent shockwaves through risk markets. As strategist Katie Stockton coined it:
“When the Nasdaq sneezes, crypto catches pneumonia.”
Fresh U.S. Treasury stablecoin guidelines fired up compliance fears, while China’s renewed crackdown on offshore trading, including a directive targeting Hong Kong platforms, sent regional investors scrambling. Asia accounts for 40% of global Bitcoin trading volume, magnifying the sell-off.
With Bitcoin slipping below key support levels, cascading liquidations followed. CoinGlass reported over $450 million in liquidations by midday UTC, mostly long positions. Grayscale’s Zach Pandl explained:
“This wasn’t organic — it was a liquidity trap. Leverage unwinds everything in its path.”
On-chain data from Glassnode showed 15,000 BTC (about $1.3 billion) flowing into exchanges on December 1, a clear sign of panic selling. Ethereum’s slide dragged DeFi markets: Uniswap and Aave saw 8–10% TVL erosion. Altcoins were hit even harder:
- Solana: –7.5%
- Cardano: –9%
- Dogecoin: –12%
Stablecoins held, though a brief pause in USDT issuance sparked depegging concerns.
Sentiment collapsed as the Fear & Greed Index fell from 52 to 25, entering “Extreme Fear.” Retail exchanges saw 30% spikes in withdrawals, while BlackRock’s Bitcoin ETF recorded $120M outflows on December 1 alone.
In emerging markets like Pakistan, the pain was worse due to PKR–USD pressures. Bitcoin’s plunge translated into a drop of nearly 12,000 PKR in local P2P markets, delaying crypto-based remittances and squeezing freelancers. December 1’s crash exposed the crypto sector’s vulnerability to macro shifts, regulatory moves, and extreme leverage. As the market steadies itself, the question is when and how severe the next wave will be.
