Crypto markets wobble: BTC sinks below $86k, ETH gives up $3k; what's next?

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The bears continue to reign over crypto markets as flagship digital tokens entered the year’s final month on the back foot. Bitcoin (BTC) tumbled below $86,000, while Ethereum (ETH) slipped under $2,900, reflecting mounting risk-off sentiment among investors. 

 

The sell-off extends the post-October correction, with Bitcoin down roughly 32 per cent from its $126,198 peak and Ethereum off 42 per cent from its August high of $4,953.

 

Altcoins mirrored the mood, with Solana, XRP, and Ethereum each shedding between 5 per cent and 6 per cent, reflecting cautious positioning across the broader digital asset space. The declines follow a weekend sell-off that wiped out hundreds of millions in leveraged positions and left traders scrambling for cover.

Weekend sell-off triggers massive liquidations

Notably, the flagship token fell nearly 5 per cent on Sunday after failing to breach key resistance levels, triggering heavy liquidations. Over 180,000 traders were wiped out within 24 hours, with total liquidations hitting $539 million, largely long positions in BTC and ETH, according to CoinGlass. The cryptocurrency briefly reclaimed the $86,000 mark but continued to trade down over 5 per cent on Monday.

 

At the time of writing, Bitcoin was changing hands at $86,280.76, down 5.18 per cent over the past 24 hours on a trading volume of $60.41 billion. During the session, the flagship token oscillated between $85,653 and $91,965, data from CoinMarketCap showed. Ethereum mirrored this weakness, falling roughly 6 per cent to $2,830 on a 24-hour volume of $20.72 billion, after fluctuating between $2,807 and $3,051.

 

Analysts attribute the sell-off to ongoing fragile sentiment following the token's November loss, which came on the back of October's rally when it scaled fresh peaks.

 

"The move had no single catalyst but exposed how fragile sentiment remains after Bitcoin’s November loss. The dip can be attributed to a cascade of leveraged unwinds during thin weekend liquidity, rather than a fundamental shift in demand. Structurally, this remains a deleveraging phase: funding rates remain stretched, ETF flows show institutional caution, and retail positioning is still chasing rebounds. Yet, the swift absorption near $87,000 also shows that long-term holders and ETF cost-basis buyers around $82K continue to anchor support even amid volatility," said Vikram Subburaj, CEO of Giottus.

 

Subburaj, however, believes that macro conditions could alter the narrative quickly. On December 1, the US Federal Reserve formally ended Quantitative Tightening to freeze its balance sheet at $6.57T, marking a liquidity pivot that echoes the 2019 cycle bottom. Policy rates are already cut to 3.75–4.0 per cent, and the Standing Repo Facility is now a permanent fixture.

 

"Hence, up to $95B in monthly liquidity could re-enter markets and potentially ease pressure on risk assets. The Fed’s decision comes amid weak data visibility after a 43-day government shutdown and a divided committee on inflation risks. Crypto markets historically respond with a lag to such liquidity turns, suggesting December could set the tone for a cautious recovery phase if macro conditions stabilise," said Subburaj.

Short-term outlook remains bearish

Some analysts, however, believe that the current sell-off appears more like a leverage flush-out than a fundamental breakdown.

 

Riya Sehgal, research analyst at Delta Exchange, on the other hand, cautioned that Bitcoin’s plunge below $87,000 has intensified bearish momentum, with the asset losing over 5 per cent in the past 24 hours amid a broad market sell-off. Total crypto market capitalisation slipped 4.4 per cent to $2.94 trillion, while trading volumes spiked 38 per cent, reflecting panic-driven liquidations as over $300 million in leveraged longs were wiped out.

 

"The break below key technical support near $89,500 has shifted Bitcoin’s short-term outlook toward further downside, with potential retests of $85,500 or even $82,000 if selling persists," said Sehgal.

 

Still, structurally, she believes this appears more like a leverage flush-out than a fundamental breakdown. "Once excess leverage clears, Bitcoin could stabilise and attempt to reclaim the $90,000–$92,000 zone in the sessions ahead," said Sehgal.

 

That said, despite these headwinds, analysts believe macro liquidity from the Fed pivot could act as a stabiliser if capital rotation resumes toward large-cap cryptocurrencies.