Family, who understands this! The alarm at 8 AM on December 1st hasn’t gone off yet, Bitcoin directly gave all the people in the crypto circle a “chill to the bone” as it plummeted from 93,000 to 88,500, dropping more than 4% in just 1 hour, with Ethereum falling below 5%, and major platform coins crashing by 7%. The entire crypto market evaporated nearly 2 trillion RMB in 24 hours, with 220,000 leveraged accounts completely blown up, and 12.2 billion in funds instantly going to zero! As someone who has been monitoring the market for 5 years, I can confidently say: this sharp decline is definitely not an accident. It’s a result of multiple negative factors accumulating to unleash a “big move,” plus the high leverage and these “teammates” providing divine assistance, it would be strange if it didn’t drop!
First, let me emphasize for the newbies: this wave is not a single black swan, but a five-fold blow of 'macro kill + capital escape + regulatory panic + technical collapse + leverage explosion'. Let's break it down one by one, all of which are valuable insights!
First of all, the Federal Reserve is the behind-the-scenes 'largest operator'! Stop believing in any 'Bitcoin hedge', it's pure self-deception! In November, the number of job vacancies in the U.S. skyrocketed to a six-month high, and the stickiness of inflation directly cut the probability of a rate cut in December from 70% to 44.4%. Powell's statement that 'a rate cut is far from a certainty' has directly put risk assets on 'probation'. It is important to know that the negative correlation between Bitcoin and interest rates is as high as 90%. As real interest rates rise and the dollar index strengthens, funds are sure to flee to high-volatility assets, with Bitcoin being the first to be sold off. This is not digital gold; it is clearly a 'little brother of risk' tied to tech stocks, and a synchronous plunge is not surprising!
Secondly, large institutions are voting with their feet, and ETF outflows are more intense than a waterfall! Bitcoin spot ETFs saw net outflows for seven consecutive weeks, with a direct outflow of 88 million dollars in the last week of November, an increase of 42% month-on-month! Where are those voices claiming that 'institutional entry is stable' at the beginning of the year? Now, all institutions are secretly reducing their holdings, and market support has directly collapsed by half. Moreover, when institutions withdraw, market liquidity is directly exhausted; the depth of exchange order books has long hit bottom, and when sellers dump, there are no takers, how can prices not crash?
Then there is the regulatory 'time bomb'! The U.S. bill (Digital Asset Market CLARITY Act) is stuck in the Senate, and wanting it to land before 2026? Basically impossible! Meanwhile, the People's Bank of China held a meeting at the end of November, reiterating that speculation in virtual currency trading is off-limits, and stablecoins are directly classified as illegal financial activities. In this regulatory vacuum, institutions dare not enter the market, and small investors are panicking; the 'Crypto Fear and Greed Index' has dropped to 11, a new low for this year — this is no longer panic, it’s a collective state of terror!
Another fatal signal: long-term holders have 'run away'! Those old players we regarded as the 'ballast stone' of the market sold 800,000 Bitcoins in the past month, the most since January 2024! These people held their coins for years without action, but now suddenly liquidating on a large scale, what does this indicate? They are not optimistic about the market outlook anymore! The sudden increase in circulating supply directly rubs market confidence to the ground, and this wave of decline cannot be stopped at all!
Finally, I must complain: high leverage is the 'original sin' of the crypto space! Once Bitcoin breaks below the key support level of 90,000, 15 billion in leveraged positions are directly forcibly liquidated, leading to a vicious cycle of 'decline → liquidation → accelerated decline'. It is important to note that over 90% of those liquidated used leverage of more than 10 times. This is not investment; it is clearly gambling with one's life savings! I have long said that leverage is a 'double-edged sword'; it feels great when prices rise, but when they fall, it leaves you with nothing. Newbies using leverage are simply giving money to the market!
Having discussed the reasons, let's talk about how the market will move forward (this is just my personal opinion and does not constitute investment advice): Bitcoin is currently stabilizing around 89,000, but is a rebound possible? Difficult! Former BitMEX CEO Arthur Hayes said it might test 82,000, and I believe 80,000 is likely to be strong support, but in the short term, it will definitely oscillate below 90,000. Deutsche Bank said recovery requires clear regulation and compliant stablecoins; this statement is correct. What the market lacks now is confidence. Without confidence, funds are afraid to enter the market.
Finally, a reminder for everyone: this wave of crash once again proves that Bitcoin is no longer an asset 'detached from traditional finance'; it is a risk asset being led by Federal Reserve policies! Stop believing in leverage, and stop fantasizing about 'getting rich overnight'; macro policies and regulation are the keys to determining the future market.
Follow me! As someone who has been tracking the market for five years, in the next article, I will break down whether 82,000 can hold, teach everyone how to judge the bottom after a crash, and how to buy the dip without losing money. I will also share exclusive market analysis charts! Let's discuss in the comments whether you have been affected this time? What is your cost price? I will draw three family members to give my exclusive review notes, and let’s survive in the crypto space and make big money together!
