Market Flash Crash and Large-Scale Liquidation (Core Focus)
Overall Plunge: From December 1 to 2, the cryptocurrency market experienced a 'Black Opening'. Bitcoin (BTC) dropped sharply from above $90,000, once falling below the $84,000-$86,000 mark. Ethereum (ETH) also fell below the $2800-$2900 support level.
Severe Liquidation: The notorious 'Long Squeeze'. According to data from Coinglass and others, over 260,000 people were liquidated across the network in the past 24 hours, with total liquidation amounts reaching hundreds of millions of dollars. Most were long positions being forcibly closed.
Altcoin Bloodbath: Mainstream altcoins, including Solana (SOL), XRP, and Dogecoin (DOGE), generally fell by more than 5%-10%, with a strong risk-averse sentiment in the market.
2. The "black swan" behind the crash
This decline is mainly triggered by macroeconomic factors and institutional withdrawal:
Bank of Japan "sneak attack" (end of yen arbitrage): This is a key macro catalyst. Bank of Japan Governor Kazuo Ueda has sent a strong signal for a rate hike in December. This has led to a stronger yen, reversing the global "yen arbitrage trades" (borrowing low-interest yen to buy high-risk assets), forcing funds to withdraw from Bitcoin and U.S. stocks to repay yen debts.
ETF fund outflows: Institutional funds are withdrawing. In November, the U.S. Bitcoin spot ETF set a record for net outflow in a single month (approximately $3.6 billion), and BlackRock's IBIT fund also experienced significant outflows. This indicates that Wall Street institutions are conducting defensive sell-offs before the end of the year.
Expectations for Fed rate cuts cool: U.S. economic data has been mixed, leading to skepticism about the Fed's rate cut path in 2026, and the optimism brought by the "Trump trade" is fading.
3. Important institutional and regulatory dynamics
MicroStrategy dynamics: Despite the market downturn, MicroStrategy, led by Michael Saylor, is still active. The company has just announced the establishment of a $1.44 billion dollar reserve and updated its Bitcoin KPI targets for 2025. However, impacted by the decline in Bitcoin prices, its stock price (MSTR) has also faced a sharp drop, at one point falling more than 10%.
The People's Bank of China issues another warning: The People's Bank of China (PBoC) has recently reiterated its crackdown on illegal activities related to virtual currencies, and has issued stricter regulatory signals specifically targeting stablecoins. This has further suppressed market risk appetite during the Asian trading session.
USDT/USDC dynamics: The stablecoin market has also experienced fluctuations, with S&P Global recently lowering its stability assessment of Tether (USDT), raising a certain level of concern; at the same time, USDC has conducted large-scale destruction operations on-chain.
4. Market sentiment and outlook
"Deep bear" fear: Some analysts (such as Bloomberg reports) pointed out that Bitcoin reached an all-time high of approximately $126,000 in October, and the current price (around $86,000) has retreated about 30% from the peak. The market worries that this is not just a correction, but a cyclical winter similar to that of 2022.
Key level: Traders are currently closely monitoring Bitcoin's $80,000 threshold. If this psychological barrier is broken, it may trigger a larger-scale panic sell-off; resistance is at around $92,000.
