Analysis of the reasons for the fall of BTC on December 1, 2025

According to the latest market data and real-time discussions, Bitcoin (BTC) experienced a significant fall during the morning session on December 1 (Monday), sliding from around $90,000 to below $86,000, with a drop of about 4-5%. The entire cryptocurrency market evaporated approximately $210 billion in market value. Among them, the scale of long liquidation exceeded $400 million, mainly concentrated in low liquidity windows during the Asian trading session. This decline is not driven by a single event, but rather a multiple overlay effect of macro factors, leverage mechanisms, and market structure. Below, I will start with the core reasons, provide a detailed breakdown, and analyze in conjunction with historical context and potential impacts.
1. Macro tightening signals: The shift in the Bank of Japan's policy has triggered a global repricing of risks.
• Core Trigger: The yield on Japan's 2-year government bonds has surpassed 1%, marking the first significant upward signal after years of ultra-loose policies. The market interprets this as a possible interest rate hike by the Bank of Japan (BOJ) in December. This directly impacts the famous "yen carry trade," which involves borrowing low-yielding yen to invest in high-yield risk assets (such as BTC). An increase in yields means higher borrowing costs, forcing investors to close out high-risk positions, leading to capital outflow from the crypto market.
• Market Reaction: The fall occurred from Sunday evening to Monday morning (UTC time early Monday), during the period of the lowest global liquidity (no inflow from US stock ETFs, no major news). This amplifies price volatility: a small selling pressure can break through support levels, triggering a chain reaction. On platform X, several analysts (such as @TedPillows and @coinbureau) pointed out that this is a classic combination of "macro + leverage," similar to the "liquidity withdrawal" during the Fed's interest rate hike cycle in 2022.
• Evidence supports: The Japanese bond market has been volatile for several weeks, compounded by the fact that the US QT (Quantitative Tightening) will officially end on December 1, but the end does not immediately inject liquidity—historical data shows that the expansion of the Federal Reserve's balance sheet takes months to transmit to risk assets. In addition, China's strengthening of stablecoin regulation (calling it a "national security threat") further exacerbates selling pressure in Asia.
• Impact Assessment: In the short term, global risk appetite has cooled (Nasdaq futures fall 0.6%), and BTC, as a high-beta asset, is the first to be affected. However, in the long run, if the BOJ raises interest rates moderately, this may just be a "healthy adjustment" rather than a trend reversal. Gold and silver futures have risen during the same period, indicating a shift of funds towards safe-haven assets.
2. Leverage liquidation and low liquidity amplification effect
• Mechanism Analysis: The BTC price accumulated a large amount of leveraged long positions (10x-100x) in the range of $89,900 to $90,000. Late Sunday night, a wave of selling pressure broke through this range, triggering stop-losses and forced liquidations, resulting in a "waterfall" decline. According to Coinglass data, the total liquidation amount exceeded $700 million, with BTC accounting for about 60%. Open Interest (OI) sharply decreased, indicating market "de-leveraging" rather than a structural collapse.
• Why is it particularly severe today: With thin liquidity over the weekend (before the Asian market opens), combined with a net outflow of $800 million from ETFs in late November, market depth has dropped from $766 million at the beginning of October to $535 million. In the X discussion, @FXEmpirecom mentioned "pure structural adjustment without headline drivers," similar to the "psychological support trap" after the $126,000 peak in October.
• Historical Comparison: Similar to the bear market in 2022, BTC once fell over 20% due to leveraged liquidations. However, this time the Fear & Greed Index has risen to 28 (neutral to fear), and the Altcoin Season Index is at 35, indicating that sentiment is not in extreme panic.
• Impact Assessment: This is seen as a "health reset," clearing excessive leverage (Polymarket shows an 87% probability of a Federal Reserve rate cut in December). Short-term volatility may intensify, but if there are no further macro shocks, prices may stabilize in the range of $85,000-$88,000.
3. Institutional and whale selling pressure: ETF outflows and concentrated selling
• Institutional behavior: In November, BTC ETF saw a net outflow of over $800 million, with funds like BlackRock reducing their holdings; rumors of a government shutdown on November 13 increased liquidity concerns. There are rumors circulating on X about a "coordinated sell-off": Wintermute sold 9,315 BTC, Coinbase 8,375 BTC, etc., but this is mostly speculation, and the actual situation may be a response to algorithmic trading.
• Whale Dynamics: Short-term holders (<1 million BTC) panicked and sold 148,000 coins around $96,000, with an average cost higher than the current price. Miners have not sold in large quantities, indicating that non-supply side pressures are dominant.
• Evidence Support: The Coinbase Premium Index has been negative for three consecutive weeks, indicating dominant selling pressure in the U.S. Compared to the peak in October, the market capitalization has evaporated by $1 trillion (24%), but institutional holdings still account for 4% of the circulation.
• Impact Assessment: This strengthens the correlation between BTC and tech stocks (with a correlation coefficient of 46% with Nasdaq in 2025), and concerns over the AI bubble (such as Nvidia's volatility) spill over into crypto.
4. Secondary Factors: Overlay of Regulation and Technology
• Regulatory noise: Upbit exchange suffers a hack with a loss of $37 million; University of Tokyo releases a negative report on cryptocurrencies; China views stablecoins as a threat. While these are not the main causes, they amplify the panic.
• Technical Analysis: The monthly line closed below $93,000, confirming a bear market structure (RSI oversold at 13.55, MACD negative). Support has moved down to $85,600, if it fails or tests $50,000.
• Historical Perspective: BTC has fallen 2% from 2025 to date, wiping out the annual increase, but the annualized return is still positive (compared to a 64% fall in 2022). Periodic adjustments are common, and November is known as the "devil's month."
Overall Outlook and Suggestions
The recent fall is a "perfect storm": macro tightening (Japan's yield + the Fed's QT ending) meets leverage vulnerability, with the non-BTC fundamentals deteriorating (halving effect and institutional adoption still ongoing). Short-term risk is skewed to the downside (if the probability of a rate cut in December falls below 55%), but in the medium to long term, the narrative of BTC as "digital gold" remains unchanged—gold prices have risen 54% this year, and the correlation with BTC has risen to 42%.
Investment advice (not financial advice): prioritize risk control, pay attention to the December Federal Reserve meeting and ETF inflows. If the RSI rebounds, $85,000 may become a buying window. Long-term holders can view it as a "discount opportunity," but leveraged players should hedge. The market always has fluctuations; the key is structure, not emotion.
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