Cryptocurrencies faced another significant downturn Monday, with Bitcoin and Ethereum experiencing sharp declines that intensified an ongoing market rout, erasing billions in value and unsettling traders gearing up for more fluctuations.
In the early hours of trading, Bitcoin plummeted nearly 6% to dip below $86,000, but managed to recover slightly to around $86,788. Ethereum had an even worse day, dropping more than 7% at one point to approximately $2,800. Other notable cryptocurrencies also saw steep losses, with Solana tumbling nearly 8% and Dogecoin shedding over 8%, continuing the downward trend that has characterized the sector throughout November.
This renewed decline comes at a time when the broader crypto market was attempting to find stability after enduring a protracted sell-off triggered by the erasure of $19 billion in leveraged bets in early October. This turmoil began shortly after Bitcoin peaked at an all-time high exceeding $126,000.
November has not been kind to Bitcoin, which recorded a 16.7% loss, marking its second worst monthly performance of 2025, although some gains were recovered last week. The sudden reversal on Monday, however, highlights the fragile state of investor sentiment as the industry transitions into December. Sean McNulty, APAC derivatives trading lead at FalconX, commented, “It’s a risk off start to December.”
The cryptocurrency market underwent a volatile six-month cycle characterized by peaks and troughs affecting all significant assets. Between June and October, the market experienced a dramatic rally fueled by institutional investments, ETF launches, and technical upgrades. During this period, Bitcoin reached record highs, Ethereum nearly doubled in value, and tokens like Solana and Dogecoin surged due to substantial accumulation by large-scale investors.
The tide turned sharply in the fourth quarter, with Bitcoin recording a slump of over 19% from the mid-year high through the start of December. Other tokens such as Solana, Dogecoin, Cardano, Avalanche, Polygon, and Polkadot reported steep losses ranging from 15% to more than 45%.
Concerns have been raised regarding the low inflows into Bitcoin exchange-traded funds (ETFs) and the lack of buyers willing to enter the market amidst declining prices. McNulty suggested that structural challenges would persist into the month, with $80,000 identified as a critical support level for Bitcoin going forward.
Market sentiment shifted later in the day, impacting equities globally. Asian markets are responding to recent developments, with trade in Japanese stocks showing volatility following Bank of Japan Governor Kazuo Ueda’s hints of a potential rate hike, a move that could disrupt the profitable yen carry trade and subsequently impact various risk assets, including cryptocurrencies.
Moreover, the concern over excessive leverage in the crypto market remains prevalent. Ben Emons, founder and CIO of Fedwatch Advisors, indicated that investors continue to feel nervous in the aftermath of October’s significant shake-up. He noted that leverage levels reaching up to 200x on some exchanges could lead to substantial liquidations if Bitcoin prices do not recover from their current lows.
Emons highlighted the risk posed by the retail-driven nature of the market, noting that retail investors tend to react differently compared to institutional players. The decentralized, opaque framework of many exchanges complicates risk assessment, underscoring the hazards associated with this leveraged environment. “That is something to reckon with going forward from here, as more and more leverage is used in this space,” he stated.
