Bitcoin Drops Below $87K: Weekly Gains Erased in One Move

Bitcoin experienced a sudden decline, dipping below the $87,000 mark and erasing a week's worth of gains in a single trading session.

Key Takeaways

Bitcoin briefly fell below $87,000, erasing a week’s worth of gains in a single session.
A sudden selloff triggered $400 million in liquidations within an hour, resulting in a 4% decline in the global crypto market.
The selloff reflects risks associated with leveraged trading and a possible shift in investor sentiment toward traditional assets.
Analysts warn of potential further declines, particularly if Bitcoin breaches critical support levels.

This rapid selloff resulted in $400 million worth of liquidations within just 60 minutes, leading to a 4% drop in the global cryptocurrency market capitalization, which now stands at $3.04 trillion. Trading activity spiked as both retail and institutional investors reacted promptly to the price movements.

Market Instability Triggers Significant Liquidations

The downturn prompted a dramatic increase in liquidations among leveraged positions, underscoring the volatility in the market. According to market data, $400 million was liquidated in just one hour. This swift decline highlights the considerable risks traders face during sudden price fluctuations.

Breaking News: Bitcoin dropped by $4,000 in just two hours as widespread liquidations returned.

Over the last hour, $400 million in leveraged long positions were liquidated. Trading volume surged to over $110 billion while Bitcoin’s market dominance was recorded at 57.1%. Meanwhile, Ethereum accounted for 11.3%, based on CoinGecko data.

The Kobeissi Letter attributed this crash to low liquidity over the weekend and high levels of leverage, stating, “This crypto bear market is still structural. We do NOT consider this a fundamental decline.” They noted that Bitcoin dropped $4,000 in a matter of minutes despite the absence of any significant news, leading to a domino effect of selloffs driven by mass liquidations of leveraged positions.

Several analysts have cautioned that Bitcoin’s current price trajectory mirrors previous bearish cycles. After recovering to above $90,000 following a drop on November 20, Bitcoin remained around $91,208.85 on November 28 and held the $90,000 support for a span of six days.

Korbot Labs also indicated that Bitcoin’s recent activity resembles trends from April 2024, when the price rebounded above $70,000 before plummeting to $57,000 in May and subsequently to $67,000 in June. This pattern suggests the possibility of more sideways movement or another corrective phase.

Another analyst warned of the potential for further losses, noting that a “wipeout” could happen if Bitcoin drops below the $80,000 support level. "Bitcoin does not seem like a favorable start to the week! It is nearing a 2-1-2d measured move, which often results in a ‘wipeout’ if we break through $80,000. We could see prices fall as low as $48,000 if selling persists through year-end."

Technical analysis points to key support levels. If selling continues, there could be a significant drop. A fall to $48,000 represents a steep 45% decline from current prices, but such a shift would likely require ongoing bearish sentiment.

Changing Asset Preferences Influence Market Sentiment

Some analysts view the Bitcoin selloff as part of a greater change in asset allocation. This trend emerged as traditional safe-haven investments, such as precious metals, began to outperform cryptocurrencies, suggesting that some investors are re-evaluating their risk exposure.

Asset Rotation Chart

This perspective argues that capital is shifting from digital assets to more traditional “hard money” alternatives. Silver, for instance, has seen a rise even as Bitcoin has fallen. Some analysts interpret this as an indication of evolving investor preferences: “While #Bitcoin just wiped out most of last week's gains in one candle, #Silver is surging as if there’s no tomorrow. Investors are favoring tangible assets over speculative ones. The transition is loud and clear: Paper wealth → Hard money, Digital risk → Monetary metals,” commented Macrobysunil.

This theory continues to spark debate. Historically, Bitcoin has shown resilience, often bouncing back from substantial declines. Its market dominance of 57.1% illustrates that it continues to attract a majority of incoming digital asset investments, despite the surrounding volatility.

As of December 1, Bitcoin briefly dipped below $87,000 but quickly rebounded. At the time of this report, Bitcoin is trading within the range of $87,200–$87,400, with market players closely monitoring whether the $87,000 support level will hold.