Why Is Bitcoin Dropping Today? The $144 Billion Crypto Market Shakeout Explained

Crypto's trillion-dollar party just got a $144 billion hangover. Bitcoin leads the retreat, dragging the entire digital asset complex into the red. It's not a gentle dip—it's a market-wide recalibration that's got everyone from retail degens to institutional whales checking their portfolios twice.

The Liquidity Squeeze Playbook

Forget the 'number go up' mantra. When major assets like Bitcoin turn south, they don't travel alone. The sell-off triggers a cascade—leveraged positions get liquidated, altcoins get dumped for stability, and the fear spreads faster than a meme coin rumor. It's the market's brutal, automated way of flushing out excess risk. Suddenly, that 'diversified' crypto portfolio looks a lot like different shades of red.

Beyond the Headline Numbers

A $144 billion loss isn't just a statistic; it's vaporized leverage, rekt trading strategies, and postponed moon missions. This kind of move shakes out the weak hands and tests the conviction of long-term holders. It separates the projects with actual utility from those running on hype and hot air—the financial equivalent of a tide going out and revealing who's been swimming naked.

The Silver Lining in the Sell-Off

Paradoxically, these drawdowns are what build stronger foundations. They force a focus on fundamentals over froth. For savvy investors, it's a chance to assess which assets are being sold out of panic versus which have genuine problems. The market has a long history of punishing impatience and rewarding those who understand its cyclical, volatile nature—just ask anyone who sold during a previous crash only to watch prices eventually soar past old highs.

So, is this the end of the crypto story? Hardly. It's just another volatile chapter in an asset class that refuses to play by traditional finance's rulebook—a market that can create and destroy fortunes before Wall Street finishes its first morning coffee.

Bitcoin Price today saw a sharp price crash, falling below $86,500 and triggering a crypto market crash. BTC Price dropped from around $91,300 to nearly $87,000 within hours, wiping over $144 billion off the total crypto market cap. 

Why Is the Crypto Market Down Today?

The market was already under pressure from concerns about inflation, tariff talks, and consistent outflows from Bitcoin ETFs. Fear intensified when Yearn Finance experienced a major exploit: hackers drained its yETH pool and routed 1,000 ETH through Tornado Cash. This incident raised fresh concerns about DeFi security. 

With sentiment already weak, the attack added further selling pressure, contributing to the sudden crypto crash as traders worried that panic withdrawals could spread across other DeFi platforms.

Bitcoin Price Crash Caused by Big Sell-Offs and Market Moves

The decline wasn’t solely due to the DeFi hack. Since mid-November, the market has been undergoing heavy deleveraging, clearing billions of dollars in long positions. This makes bitcoin highly sensitive to even minor sell-offs.

Analyst Ash Crypto noted that Bitcoin’s $5,000 drop wiped out over $210 billion from the market and liquidated nearly $700 million in positions, despite no significant negative news. He described the event as a “pure manipulation dump,” likely aimed at flushing Leveraged traders.

Weekend Selling and Thin Liquidity Worsen the Market Drop

The weekend liquidity in crypto remains extremely thin. With fewer active buyers and sellers, any sudden wave of selling impacts the market more severely. Combined with record-high leverage on exchanges, these drops can trigger cascading crypto liquidations, creating a domino effect that accelerates the crash. This MOVE reflected structural weaknesses, not a fundamental decline in Bitcoin’s value.

• Also Read :
•   Why Crypto Is Going Down Today [Live] Updates On Dec 1,2025
•   ,

The Federal Reserve recently ended its 30-month liquidity drain, halting Quantitative Tightening after removing over $2 trillion from the system. With a December rate cut anticipated, liquidity could return to the markets soon, easing pressure on risk assets like cryptocurrencies.

How Low Can Bitcoin Price Go?

Bitcoin Price is currently holding NEAR the key $87,000 support level. Maintaining this support could stabilize the market. However, if BTC breaks below it, analysts warn it could slide first to $80,400 and potentially toward $75,000 if fear intensifies. Conversely, a Fed rate cut could spark a rebound, pushing Bitcoin back toward the $95,000–$100,000 range in the coming weeks.

Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.

FAQs

Bitcoin is falling due to heavy sell-offs, DeFi hacks, thin liquidity, and panic selling in leveraged positions.

Yes. A potential Fed rate cut and returning liquidity could push Bitcoin toward $95,000–$100,000 in the coming weeks.

Weekend liquidity is thin, so sudden sell-offs trigger cascading liquidations and amplify price drops in leveraged markets.

As per Coinpedia’s BTC price prediction, the Bitcoin price could peak at $168k this year if the bullish sentiment sustains.