- Bitcoin falls to $85,000 as the crypto market drops more than 5%.
- Over $600 million in leveraged positions faced liquidation within 24 hours.
- Japan’s rising bond yields prompt risk-off sentiment across global markets.
Crypto markets recorded sharp losses on the first day of December. Bitcoin has plummeted from above $91,000 to $85,000, then settled at $86,214, a 5.3% drop in the past 24 hours. This current dip has now increased Bitcoin’s total loss to 21.6% over the past month. Meanwhile, the broader market also slid more than 5%.
The downturn followed a wave of liquidations, thin trading activity, and rising global rate concerns. The market lost about $130 billion in value within hours, pulling total capitalization down to $2.92 trillion before a minor rebound to $3.015 trillion.
Similar to Bitcoin, Ethereum, XRP, Solana, and BNB also recorded declines of more than 5%. The move continued the weakness seen in October and November, when several liquidation spikes and volatile weekend trading periods created unstable conditions.
Related: Fed to Stop Draining Cash From December 1, Setting Stage for Crypto Rally
Liquidations Lead the First Drop
More than $640 million in leveraged positions were liquidated in the last 24 hours. Bitcoin accounted for $185 million of these losses, and long positions made up about 85% of the total.
In addition, open interest fell 1.13%, suggesting traders were closing positions rather than re-entering the market. Funding rates remained slightly positive, suggesting traders continued leaning toward bullish bets before the sell-off.
Bitcoin Wealth noted that thin liquidity during late-night and weekend sessions played a major role. When order books lack depth, even moderate selling pressure can cause exaggerated price movements. Notably, the $4,000 drop in Bitcoin price occurred without any major news or policy announcements.
Japan’s Bond Market Adds Macro Pressure
Meanwhile, Japan’s two-year government bond yield rose above 1% for the first time since 2008. The move strengthened the yen and prompted investors to unwind carry trades, where traders borrow yen at low rates to buy higher-yielding assets, including Bitcoin.
As yields rise, these trades become less profitable. Many traders shifted funds back to traditional safe assets, adding pressure on cryptocurrencies. Markets now expect a Bank of Japan rate hike on Dec. 19, which could extend the shift away from risk.
Related: End of “Free Money”: Rising Japanese Yields Threaten Global Markets and Crypto
What’s Next for Bitcoin
Despite recent losses, Bitcoin’s long-term outlook is supported by growing bank adoption and the rise of Bitcoin-backed digital credit, factors highlighted by Michael Saylor as potential drivers of 2026 growth.
Related: Michael Saylor Highlights Two Factors That Could Drive Bitcoin Price
Right now, the Bitcoin Fear and Greed Index shows extreme fear, currently at 20, while the Altcoin Season Index stands at 23. Polymarket data indicates an 87% chance of a December Fed rate cut.
Market watchers expect volatility to remain elevated as traders assess liquidity levels and upcoming economic events. Next week’s calendar includes Federal Reserve Chair Jerome Powell’s speech, as well as employment and inflation reports.
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Source: https://coinedition.com/heres-the-main-reason-bitcoin-dipped-5-to-85000-on-december-1/