Bitcoin slumped sharply on Monday, logging its worst single-day performance since March as a renewed wave of selling pressure hit the cryptocurrency market. The world’s largest digital asset fell about 6% to $85,894 in afternoon U.S. trading, while ether dropped 8.4% to $2,776. Solana and several other major tokens also declined, with Solana sliding more than 9% to below $125.
The latest downturn comes amid a broader risk-off mood across global markets at the start of December. Digital asset–linked stocks in Asia also fell after the People’s Bank of China warned over illegal activities tied to digital currencies, adding further pressure to sentiment.
Analysts said heavy leverage across crypto exchanges continues to fuel volatility. Ben Emons, founder and CIO of Fedwatch Advisors, told CNBC the day’s reversal was widely attributed to a $400 million exchange liquidation and warned that leverage levels of up to 200x in perpetual futures remain a major risk. With roughly $787 billion worth of leverage outstanding in crypto derivatives versus about $135 billion in ETFs, he said further liquidations are possible if prices stay weak.
The sell-off follows an October slide that also pulled down equity markets, with bitcoin showing increased correlation to indexes such as the Nasdaq. Emons noted that retail-driven trading and the opaque nature of decentralized exchanges are amplifying volatility.
Macroeconomic uncertainty, including doubts over the timing of a potential U.S. rate cut and concerns about stretched valuations in AI-related stocks, has added to investor caution. Analysts at Grayscale said weaker trading volumes and falling open interest in perpetual futures signal a further near-term downturn in crypto risk appetite.
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