Bitcoin price Down: What Caused the December Crash?

Bitcoin suffered a sharp drop on the first trading day of December 2025, with the price sliding nearly 5% to around $86,600. The decline followed a period of volatility, with Bitcoin losing over 21% from its November peak and about 30% from its all-time high above $126,000 reached earlier this year.

Several factors contributed to the crash. Analysts point to a risk-off environment in global markets, with investor sentiment turning negative amid uncertainty over the Federal Reserve’s upcoming interest rate meeting on December 9–10.

Mixed signals from the Fed about a potential third rate cut in December have weighed on risk appetite, causing investors to exit volatile assets like Bitcoin and turn to safer alternatives.

The selloff was also amplified by forced liquidations in crypto markets, with over $350 million in leveraged positions unwound as prices fell below key support levels. The timing coincided with a broader market correction, as shares of AI-focused stocks like Nvidia and Microsoft slid nearly 12% and 9%, respectively, over the past month, affecting high-risk investor portfolios.

Additional factors include the People’s Bank of China’s warnings about illegal digital token activity, which negatively impacted related stocks in Hong Kong. The overall crypto market saw broad selling pressure, with Ethereum, Solana, BNB, and Dogecoin also posting significant declines.$ETH $BTC $BNB #BTC86kJPShock #IPOWave #CryptoIn401k