Why is crypto going down today? Bitcoin, Ethereum lead the spiral

Bitcoin [BTC] and Ethereum [ETH] both saw a sudden sell-off as December opened. Bitcoin fell from above $89,000 to nearly $86,000 in a single hour, while Ethereum similarly fell with a drop of more than 5%.

Source: TradingView

The impact was immediate on the broader market. Total crypto market cap slid from around $1.82 trillion to below $1.72 trillion, its lowest level in weeks.

Source: CoinGecko

The charts all show a fast, heavy dump followed by a small, uncertain recovery.

Liquidations spike as BTC leads the sell-off

The pressure hit derivatives traders hard.

Source: Coinglass

In the last hour alone, counting up to press time, Bitcoin accounted for more than $1.6 million in liquidations, with Ethereum following at $847,000.

Most of the heatmap was red, so long positions were wiped out across major caps like Solana [SOL] and ZCash [ZEC].

The only pockets of green were in smaller tokens such as Pippin [PIPPIN], which saw modest gains as volatility spilled over.

Liquidity is thin, volatility runs abound

Weak liquidity drove the latest drop. The Kobeissi Letter noted that weekend sessions have repeatedly produced oversized moves this year, and this selloff fit the pattern.

With order books thinning out and leverage sitting near record highs, even a small burst of selling quickly snowballed.

BTC’s rapid $4,000 slide caused lots of forced liquidations, speeding the downturn across majors and mid-caps alike. Despite market maturity, structural fragility remains.

Until liquidity improves, sudden moves will continue to dictate price action.

Final Thoughts

• Thin liquidity and high leverage made the market extremely vulnerable to sudden sell pressure.
• Until liquidity strengthens, crypto remains prone to downside shocks.