Bitcoin briefly plunged below $87,000, wiping out a week’s gains in one session.

The fast selloff triggered $400 million in liquidations within just 60 minutes and pushed the global crypto market capitalization down 4% to $3.04 trillion. Trading activity surged as both retail and institutional investors reacted swiftly to price pressure.

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Liquidations surged across leveraged positions, reflecting the speed of the downturn. Market data noted $400 million liquidated in just one hour. This rapid wave of losses highlights the risks for traders during sharp price moves.

Trading volume spiked to over $110 billion as investors adjusted their holdings. Bitcoin’s dominance stood at 57.1%, while Ethereum held 11.3%, according to CoinGecko data.

The Kobeissi Letter attributed the crash to thin weekend liquidity and record-high leverage, saying, “This crypto bear market is still structural in nature. We do NOT view this as a fundamental decline.” The analyst noted that Bitcoin fell $4,000 in minutes with no news. This triggered a domino-effect selloff amplified by mass liquidations of leveraged positions.

Other analysts have warned that Bitcoin’s price pattern resembles earlier bearish cycles. Following a recovery above $90,000 after a drop on November 20, Bitcoin hovered around $91,208.85 on November 28 and maintained support at $90,000 for six days.

Korbot Labs describes that the current price action echoes April 2024, when Bitcoin bounced back above $70,000 only to drop to $57,000 by May and later to $67,000 by June. This pattern suggests that further sideways movement or another correction is possible.

Another analyst cautioned about the risk of deeper losses, noting that a “wipe out” could occur if Bitcoin falls through the $80,000 support level.

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“Bitcoin not a good open to start the week! Much closer to becoming 2-1-2d as a measured move. This tends to cause a ‘wipe out’ type move if we successfully break through 80.00. Could see as low as 48k if we see the sellers stick around into the end of this year.”

Technical analysis also points to crucial support zones. Should selling persist, prices could slip much further. A drop to $48,000 would mark a dramatic 45% decline from current levels, but such a move would likely require sustained bearish sentiment.

Some analysts see Bitcoin’s selloff as part of a broader shift in asset allocation. The move came as traditional safe-haven assets like precious metals outperformed. This suggests some investors are reconsidering their risk exposure.

This argument states that capital is flowing from digital assets to “hard money” alternatives. Silver, for example, surged even as Bitcoin fell. Some analysts see this as a sign of changing investor preferences.

“While #Bitcoin just erased most of the last week gain in a single candle, #Silver is breaking out vertically like there’s no tomorrow. Money is choosing real assets over speculative assets. The rotation is screaming loud: Paper wealth → Hard money, Digital risk → Monetary metals” – Macrobysunil

This theory remains hotly debated. Bitcoin has repeatedly rebounded from steep selloffs. Its 57.1% market dominance shows it still attracts most digital asset flows, despite volatility.

Meanwhile, on the first day of December, Bitcoin briefly dipped below $87,000 before quickly recovering. At the time of writing, Bitcoin is trading in the $87,200–$87,400 range, with market participants closely watching whether the $87,000 support level will hold.