Why Are Cryptocurrencies Plummeting? Bitcoin, Ethereum, and XRP in the Red

Summary: Established cryptocurrencies such as Bitcoin, Ethereum, and XRP, along with other altcoins, have seen significant drops in value. The total market capitalization of cryptocurrencies has fallen to $2.94 trillion, marking a nearly 2% decline in the last 24 hours and a 8.4% drop over the past week.

Key Takeaways

Bitcoin, Ethereum, and XRP have fallen sharply, contributing to a notable decrease in overall market cap.
The decline follows a sudden sell-off which resulted in over $125 million in long position liquidations.
Rising concerns over interest rate hikes from the Bank of Japan are major factors behind the current market instability.
The Federal Reserve's cautious monetary policy further adds to the uncertainty.
Despite recent declines, analysts believe the current downturn may be a short-term correction, as institutional investments remain strong.
New projects like Bitcoin Hyper aim to expand Bitcoin's usage while maintaining its core principles.

Bitcoin cryptocurrencies in the red

Sudden Drop in Bitcoin Triggers Liquidation Wave

Bitcoin experienced a significant sell-off shortly after U.S. financial markets opened, losing nearly $2,000 within about 30 minutes. This sudden movement wiped out around $40 billion from its market cap. Currently, Bitcoin is trading around $86,258, down 4.02% in the past 24 hours.

Bitcoin liquidations of long positions

In addition, long positions worth over $125 million were liquidated within an hour. Liquidations occur when traders using leverage are forced to close their positions due to price drops, which often exacerbates losses.

Other major cryptocurrencies have also been in the red for over a month. Ethereum has declined nearly 7% in the past 24 hours to $2,924, while XRP has dropped about 6% to $1.87. Other significant altcoins like Solana, BNB, and Dogecoin have also fallen.

Cryptocurrencies Bitcoin Ethereum XRP December 2025

Concerns Over Rate Hikes in Japan Shake Global Markets

A leading factor contributing to today's cryptocurrency downturn is rising anxiety regarding a potential increase in interest rates by the Bank of Japan later this month. Japan has maintained extremely low interest rates for years, encouraging investors to borrow cheap yen and invest it into stocks, cryptocurrencies, and other risk assets, a strategy known as the yen carry trade.

When Japan moves towards increasing rates, financing becomes more expensive. Investors are often forced to repay loans, frequently through the sale of assets.

Yen and cryptocurrencies

Historical data supports this pattern. In July 2024, following a rate hike in Japan, Bitcoin dropped approximately 26% within a week. Another rate increase in January 2025 led to a 25% decline in Bitcoin over several weeks. If the Bank of Japan raises rates around December 18-19, analysts predict a potential short-term shock to global markets, including cryptocurrencies.

Fed's Monetary Policy Adds to Uncertainty

Additional pressure is coming from the United States. While inflation is gradually decreasing, the Federal Reserve is postponing any cut to interest rates. Unemployment has risen to about 4.8%, but policymakers remain cautious.

Without significant liquidity injections, Bitcoin may face further declines. This situation arises even as companies like Strategy, led by Michael Saylor, continue to buy Bitcoin. On Monday, Strategy purchased 10,645 BTC for nearly $1 billion, but this was not enough to halt the broader sell-off.

🚨New: Strategy has bought 10,645 more Bitcoin for $980 million. @Strategy now holds 671,268 $BTC, with total Bitcoin acquisition costs of $50.33 billion. pic.twitter.com/lhCjhHp2ak — Crypto Coin Show (@CryptoCoinShow) December 15, 2025

Why This May Only Be a Short-Term Correction

Despite the current decline, analysts warn that the broader picture remains more balanced. Japan's economy is already weakened, with GDP recently dropping by 0.6%, making it unlikely for Japan to aggressively raise rates over the long term. The Japanese government has also announced a fiscal stimulus package worth 17 trillion yen to inject liquidity back into the system.

Globally, countries like the U.S., China, and Canada are gradually moving toward a looser monetary policy, which supports liquidity flow into financial markets over time.

Historically, sharp sell-offs often clear out weaker positions. After the panic selling subsides, markets typically stabilize and begin to form a new price floor. Confidence in long-term positive trends is bolstered by significant institutional purchases, such as those made by Strategy, indicating a commitment to Bitcoin's fundamental strength even during market corrections.

Strategy's Bitcoin purchase December 2025

For investors looking to stay in established cryptocurrencies, the current correction may represent an attractive opportunity for gradual purchasing of Bitcoin.

This perspective is further reinforced by the ongoing development of the Bitcoin ecosystem, ranging from the expansion of payment solutions based on the Lightning Network to new uses of Bitcoin in tokenization and data layers, along with innovative protocols.

Bitcoin Hyper Expands Bitcoin Capabilities with a Flexible Execution Layer

Bitcoin Hyper (HYPER) is one of the new projects aiming to expand Bitcoin's use without undermining its fundamental principles. It functions as a Layer 2 solution built on a rollup architecture, where transactions are processed off the main chain before being anchored back to the Bitcoin blockchain.

Bitcoin Hyper L2 technology

This approach preserves Bitcoin's high level of security, significantly enhances processing speed, and lowers transaction costs.

The project targets the realm of BTCFi and the development of decentralized applications that face technical limits on the main Bitcoin layer.

🔍 What is BTCFi? BTCFi (Bitcoin Finance) refers to the emerging segment of decentralized financial services built directly on Bitcoin's infrastructure or its extensions, such as Layer 2 solutions and rollups. Its goal is to utilize Bitcoin not just as a store of value but also as an active financial tool in areas like crypto staking, loans, decentralized exchanges, derivatives, and yield strategies.

The execution layer of Bitcoin Hyper enables the development of smart contracts, more complex financial tools, and data solutions, while providing a seamless bridge between the main chain and the second layer for moving BTC into and out of the ecosystem. This creates an infrastructure that acts as a technological bridge between conservative Bitcoin and the more dynamic world of decentralized applications.

Hyper Token Offers 39% Returns for Staking and Voting on Network Future

A key element of the network is the HYPER token. It serves as a means of paying network fees, supports a staking mechanism, and fulfills governance functions. Staking rewards are dynamic and depend on network activity and overall community involvement, currently offering a 39% annual return.

The project's visual identity is also notable; creators utilize a light design and meme aesthetics, enhancing the project's viral potential. This method skillfully boosts brand awareness and increases memorability, contributing to more rapid adoption without compromising the project's technological seriousness.

Cryptocurrencies Bitcoin Hyper staking

At the time of writing, the pre-sale of the native HYPER token has attracted over $29.5 million in capital, confirming growing investor interest in solutions based on Bitcoin's infrastructure and advancing it toward a more modern format.

You can currently purchase the HYPER token on the project's homepage at the pre-sale price of $0.013435 by connecting your Best Wallet or another compatible cryptocurrency wallet.

Visit the Bitcoin Hyper Pre-Sale