The crypto market opened December with a sharp downturn, wiping out more than $200 billion in value and dropping to around $3 trillion, its lowest level in a week.
The total market cap fell over 5% on Monday, coinciding with heavy liquidations across the futures market totaling more than $640 million.
Bitcoin slipped below key support levels, now trading 31.6% below its all-time high, while Ethereum fell around 6% to hover near $2,800. XRP also declined over 7%.
Major altcoins suffered similar losses:
Some of the biggest losers included Zcash, Ethena, and Aave, with steep double-digit declines ranging from 14–19%.
These widespread drops pulled the overall crypto market down 5.3% in the last 24 hours, marking the weakest performance of the week.
The sharp decline was driven largely massive liquidations during a period of thin liquidity on major exchanges. Late-weekend and early-Monday sessions typically see fewer active market makers, meaning even small sell orders can trigger significant volatility.
Without any major news catalyst, Bitcoin suddenly shed nearly $4,000 within minutes, liquidating large leveraged long positions. Record-high leverage in the futures market accelerated the crash, creating a domino effect that intensified selling pressure across the entire market.
According to CoinGlass, $641 million in positions were liquidated—of which $564 million were long positions—mostly within the past 12 hours, highlighting the fragility of current conditions.
Broader market sentiment remains cautious due to uncertainty over potential U.S. Federal Reserve interest-rate cuts at the upcoming December meeting.
While some Fed officials have signaled they may support easing, recent comments from Chairman Jerome Powell prompted traders to brace for a more cautious stance. Additionally, the recent end of quantitative tightening on Dec. 1 may impact liquidity and risk appetite in markets like crypto.
Historically, crypto performs strongly when the Fed turns dovish and tends to retreat under hawkish conditions. The Fear and Greed Index has now slipped back into extreme fear, showing persistent anxiety among investors.
Weak demand for U.S. spot crypto ETFs—especially Bitcoin and Ethereum funds—is also weighing heavily on sentiment.
Data from SoSoValue shows:
This marks a significant reversal after two months of strong inflows and signals weakening institutional conviction—an important driver of this cycle’s market rally.
As institutional demand cools and traders navigate a highly leveraged environment, today’s downturn reflects a combination of liquidity issues, macro uncertainty, and fading ETF momentum.
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