Bitcoin Crashes Below $87K Amid China’s Crackdown and Market Panic

<a href="https://minority-mindset.com/btc-usd/">Bitcoin</a> Drops Below $87,000 as China Crackdown Triggers Panic

Key Takeaways:

Bitcoin fell sharply below $87K, dragging the entire crypto market lower.
China renewed pressure on crypto and stablecoins, impacting sentiment.
A major wave of liquidations wiped out bullish leveraged positions.
Market signals still point to heightened volatility in early December.

Bitcoin’s price dropped below $87,000 after a short-lived try to reach $90,000, causing significant losses across the cryptocurrency market and wiping out almost all of the previous week’s profits.

The price drop happened quickly, not over time. Selling started in Asian markets and got much worse throughout the day, becoming a large-scale sell-off. Bitcoin led the way down, and most other major cryptocurrencies – like Ethereum, Solana, and Cardano – followed, with many losing between 6% and 9% of their value in a single day.

China’s renewed warning delivers the first blow

Market confidence dropped after the People’s Bank of China released a new statement reported by financial news outlets in the region. While China has prohibited cryptocurrency trading since 2021, the central bank emphasized the need for stricter enforcement, particularly regarding stablecoins, which they see as a growing concern. Officials stated that cryptocurrency speculation is increasing again, and they believe greater involvement from individual investors could threaten financial stability.

The statement didn’t offer investors much in the way of new policy details, but the fact that the warning came at a sensitive time – when the market was already fragile and heavily invested – made it particularly significant. Because stablecoins are essential to keeping crypto markets flowing, even a small suggestion of trouble for them can cause big swings in both traditional and decentralized crypto exchanges.

A violent liquidation cascade follows

Things got pretty rough after Bitcoin dropped below $90,000. The derivatives market started to fall apart fast – a lot of traders who were betting prices would go up were forced to sell, which just drove the price down even further. In just one day, over $600 million worth of leveraged trades were wiped out, and most of that loss happened in Bitcoin and Ethereum. It was a painful 24 hours for anyone using leverage, to say the least.

For weeks, experts warned that too much borrowing was driving market activity, and Monday’s sudden drop confirmed their concerns. Almost 90% of the trades that were automatically closed due to losses were bets that prices would rise, indicating traders were overly optimistic about the recent attempt at a recovery last month.

Technical indicators don’t yet show stability

Looking at the charts, things don’t look promising for Bitcoin in the near future. The price has struggled to recover above $92,000, and it’s been making lower highs consistently since late October. While the RSI suggests the price might be nearing a bottom, it hasn’t confirmed it yet. Additionally, the MACD is still trending downwards, indicating that sellers are still in control.

Financial experts predict that even if prices briefly rise, significant price swings will probably continue until traders who have borrowed money to invest reduce their positions and direct purchases from the market become more common.

Seasonality adds another psychological blow

The recent price drop is especially concerning because of when it happened. Bitcoin already experienced a significant loss of over 17% in November, making it the worst November the cryptocurrency has had since 2018. Historical data suggests this could lead to further declines, as previous Novembers with price drops – like those in 2018, 2019, and 2022 – were all followed by losses in December.

Investors have noticed this pattern and are worried Bitcoin might repeat past December declines, where price swings at the beginning of the month led to a prolonged drop. Bitcoin’s recent volatile start to December is only adding to those concerns.

“Not a fundamental collapse,” says market research

Not everyone believes the recent market drop signals deeper problems. Some experts think it’s simply a correction caused by excessive borrowing, not a fundamental change in the economy. Adam Kobeissi, a macro strategist, believes a large surge in selling triggered a chain reaction of margin calls, causing the rapid decline. He argues this drop is more about how people positioned themselves in the market, rather than a change in overall investor feelings or a large-scale withdrawal of funds.

Crypto’s liquidity issue:

Throughout this year, we’ve repeatedly observed significant price changes in crypto, particularly on Friday and Sunday evenings.

Just now, we saw Bitcoin fall -$4,000 in a matter of minutes without ANY news at all.

Why? Liquidity is thin.

Then, add this to the fact that…

— The Kobeissi Letter (@KobeissiLetter)

Analysts tracking investment trends say demand for ETFs remains solid, with continued growth in both custody of assets and long-term interest. However, they caution that traders who are taking on too much risk will likely continue to face losses until actual buying interest picks up and becomes the primary market force.

Instead of a continued price drop, experts are predicting a period of significant price swings. Bitcoin’s price is expected to find initial support between $82,000 and $84,000, where buyers might try to push prices up. To regain a strong upward trend, however, the price needs to break above $90,000. If the price falls below $82,000, another wave of selling could occur. Conversely, if more money flows into Bitcoin ETFs and overall demand increases later this month, prices could quickly bounce back from their current low.

Where the market stands now

As a researcher tracking the crypto market, I’m observing a period of really high volatility right now. Even small news items or changes in trading volume seem to be causing significant price swings. Specifically, we’re closely watching the $82,000 to $84,000 range for Bitcoin. If Bitcoin drops below that level, we could see another round of selling. However, if it holds above that range, it might signal the start of a price recovery.

Overall, market confidence is down. With China speaking more firmly, the risk of forced selling still present, and typical December trends being unfavorable, the first few days of December will likely determine how the market performs for the rest of the month.

This article is just for informational and educational purposes, and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. Always do your own research and talk to a qualified financial advisor before investing.

2025-12-01 11:14