Today, the cryptocurrency market experienced a sharp decline with major coins like Bitcoin and Ethereum, as well as XRP, all posting huge losses. Bitcoin was down 6.61% at 85,392 dollars as heavy selling pounded global markets. Ethereum slumped by 6.78% at 2,821 dollars as leveraged positions were unwound on various exchanges. XRP suffered losses after failing to break a major resistance level close to $2.29.
The sell-off occurred after the Bank of Japan had signalled a 76% chance of a rate hike in December. This pushed Japan’s two-year government bond yield to 1.84%, the highest since 2008. The move disrupted the yen carry trade, forcing many traders to reduce their risk quickly.
Liquidity in the markets tightened at an incredible pace. Japan and China cut their U.S. debt purchases, triggering a flight by investors from high-risk assets such as cryptocurrencies. Automated trading systems further placed upward pressure, particularly at the beginning of a new day, week, and month catalysing portfolio resets across exchanges. In just 24 hours, liquidations reached 637.57 million dollars, while long positions alone lost 567.96 million dollars.
Bitcoin and Ethereum in red signalling a price decline.
Image Credits – DeCrypt
Among them, Bitcoin suffered the biggest blow, losing over 200 million dollars. Ethereum saw 159 million dollars liquidated, while Solana’s figure stood at nearly 35 million dollars. The period of the crash was most intense between the four-hour and twelve-hour time window, as the selling momentum accelerated, pushing prices down quickly.
Interestingly, no significant crypto-specific news had driven the drop. The sell-off had been a consequence of the macroeconomic shocks together with liquidity stress and technical volatility. What this means is that the fundamentals of blockchain technology or the coins themselves were not the reason for this sudden crash. The market reaction reflected broader financial conditions and the mechanics of trading rather than weaknesses in the cryptocurrencies.
This event has shown how sensitive crypto markets still are to news in the global economy and technical analysis. Even when coins such as Bitcoin and Ethereum have strong fundamentals, large shifts in interest rates or international debt purchases can trigger sudden, dramatic changes in price through trading algorithms. For investors, it’s a signal that market movements are linked to a mix of global finance, automated trading, and human behavior.
Why has the crypto market crashed today?
The sell-off began after the Bank of Japan indicated there was a 76% chance of raising interest rates on December 19. Japan’s two-year bond yield jumped to 1.84%, the highest it has been since 2008. This caused panic across global markets because it threatened the yen carry trade, which was at risk. That trade works by borrowing cheap yen and using it to invest in higher-yielding assets around the world.
When borrowing costs rise, traders tend to close their positions. Money moved quickly out of risky assets, and cryptocurrencies were hit immediately. Bitcoin and other coins weakened even before the U.S. market opened for trading.
The overall mood worsened as global markets shifted to a risk-off. Investors pulled back from equities, bonds, and digital assets. Crypto now behaves like a high-beta speculative market. That means when investors lose risk appetite, crypto prices tend to drop faster and more significantly than most other assets.
Why Bitcoin (BTC) is down today?
Bitcoin (BTC)
Bitcoin took one of the biggest hits during the recent crypto sell-off. Leveraged traders were caught off guard as BTC fell below key support levels. This drop triggered a wave of margin calls and stop-loss orders, forcing many traders to sell automatically.
Automated trading systems added to the pressure. As the new day, week, and month began, algorithms simultaneously cut positions and risk models recalibrated. This created a cascading effect across the market. Within hours, more than 200 million dollars in Bitcoin long positions were liquidated. The forced selling pushed Bitcoin sharply lower, despite no negative news coming from the Bitcoin ecosystem itself.
The broader macroeconomic environment exacerbated the situation. Rising interest rates in Japan, reduced U.S. liquidity, and a lower appetite for risk caused institutional investors to rebalance their portfolios. Many also decided to take profits after the recent highs seen in 2025. These factors combined to create one of the steepest declines in Bitcoin’s history.
Why is Ethereum (ETH) down today?
Ethereum (ETH)
Ethereum fell sharply alongside Bitcoin, experiencing even larger percentage losses. ETH dropped to 2,821 dollars as liquidations spread across altcoins. In just 24 hours, roughly 159 million dollars in Ethereum long positions were wiped out.
Market data indicate that the decline was caused mainly by liquidity stress rather than any issues with the Ethereum protocol itself. There were no major updates, security problems, or network changes behind the drop.
Lower liquidity throughout November, combined with heavy speculative trading, made Ethereum more sensitive to sudden swings. When market sentiment turns negative, ETH often reacts more quickly and sharply than other cryptocurrencies.
Why is XRP down today?
XRP fell in tandem with the broader crypto market. The coin could not break through a key resistance range between 2.19 dollars and 2.29 dollars. This created a bearish pattern that technical traders interpreted as a sell signal.
Selling picked up as liquidations spread across other altcoins. XRP did not face any major regulatory or technical issues today. However, weakening demand and low trading volume added extra pressure. Analysts expect XRP to remain volatile in the short term as long as global liquidity stays tight.
Are liquidations intensifying the crypto crash?
The market downturn turned into a full crash as liquidation volumes surged. In the last 24 hours, more than 637.57 million dollars in crypto positions were liquidated. Long positions made up 567.96 million dollars of that total, showing just how heavily traders had bet on prices rising.
Liquidations spiked from 15 million dollars to 578 million dollars in just eight hours. This shows how quickly momentum shifted and how fast the sell-off escalated. Bitcoin and Ethereum suffered the largest losses, followed by Solana, XRP, ZEC, and Pippin.
The crash also coincided with the monthly and weekly candle closes, a time known for sharp volatility in crypto markets. This timing likely amplified the sell-off, triggering more automated selling and cascading liquidations.
Disclaimer – The information provided in this article is solely for educational and informative purposes. The contents of this article should not be considered as financial or investment advice. Cryptocurrency markets are highly volatile, with prices that can fluctuate rapidly. Always do your independent research and consult with a qualified financial advisor before making any investment decisions. Neither the author nor the publisher accepts any liability for potential losses and/or damages arising from using this information.