Bitcoin dropped sharply at the start of Asian trading on Dec. 1, wiping out billions in market value and triggering a wave of forced liquidations as December opened with heightened volatility, market data shows.
The flagship cryptocurrency slid from its weekend levels before finding support, while major altcoins also posted losses, according to CoinMarketCap. The broader selloff pushed total crypto market capitalization lower as weakness spread across digital assets.
Bitcoin falls alongside altcoin market as investors rotate to safety
The downturn coincided with a rise in gold prices, hinting at a shift toward traditional safe-haven assets amid uncertainty around Federal Reserve policy and global economic conditions. Analysts said the precious metal’s rally is drawing risk capital away from cryptocurrencies, especially as global liquidity tightens.
Trading activity spiked during the decline but tapered off as bargain hunters stepped in. Market observers said the move was driven primarily by liquidations of overcrowded leveraged long positions rather than fundamental catalysts.
On-chain data reveals mixed sentiment. Large holders and long-term investors have slowed accumulation, while smaller retail addresses holding under 0.1 BTC continued to buy at discounted prices. Meanwhile, exchange balances rose along with stablecoin reserves, signaling both fresh buying power and renewed selling pressure as traders sought liquidity.
Short-term holders realized steep losses during the drop, pushing Bitcoin below their average cost basis—a level that historically reflects stress among newer market participants. Analysts warned that Bitcoin must reclaim key thresholds to stabilize; failure to do so could open the door to deeper retracements.
The decline comes ahead of a dense macroeconomic week, with U.S. manufacturing and services data, employment reports, and inflation readings all poised to influence expectations for future Fed decisions.
Bitcoin-linked ETFs have seen uneven flows in recent days, while futures funding rates were elevated prior to the downturn, reflecting heavy leverage buildup across derivatives markets.
Historically, December brings increased volatility to crypto due to thinner liquidity during holiday periods. Despite the latest retreat, Bitcoin remains up about 90% year-to-date, though it now sits roughly 20% below its mid-November all-time high.
