The cryptocurrency market suffered a concentrated blow on December 1, 2025, when $637M in derivatives liquidations swept across major tokens, led by Bitcoin, Ethereum and XRP. The move wiped significant value from prices and exposed concentrated leverage and thin liquidity during a macro-driven repricing. The session underscored how quickly risk can escalate when liquidity thins and leverage is elevated.
Bitcoin fell from about $92,000 to breach $86,000, with some reports showing a low near $80,500; Ethereum dropped into a $2,800–$2,900 range; and XRP declined 8.72% to trade below $2.00. The sell-off erased an estimated $144B–$200B of market capitalization in a rapid session of deleveraging.
The $637M total was predominantly long liquidations, with $567.96M in longs and short squeezes accounting for the remainder. Over 220,000 traders were affected, and roughly $400M of long liquidations occurred within a single hour, illustrating how fast leveraged exposure can vaporize when liquidity thins. Reported liquidation distribution included more than $200M tied to Bitcoin positions, about $159M in Ethereum, and roughly $35M attributable to Solana during the same episode.
Market volumes had been unusually weak ahead of the move, with Bitcoin volumes down about 31% and Ethereum volumes down about 43% versus prior levels, leaving order books shallow and amplifying price impact. Analysts framed the event as a market plumbing failure rather than a collapse of on‑chain fundamentals:
Catalysts and implications for traders and institutions
Primary catalysts were macroeconomic and technical. A signal from the Bank of Japan that priced a roughly 76% chance of a rate hike by December 19 triggered a rapid unwind of yen carry trades, prompting repatriation of capital and reduced risk‑asset demand. Concurrently, lower net purchases of U.S. debt by large Asian buyers tightened global liquidity, compounding pressure on leveraged positions. The new day/week/month boundary reset many automated strategies, producing near‑simultaneous algorithmic selling.
High-profile comments intensified sentiment risk: Strategy’s CEO hinted at potential Bitcoin sales to fund dividends, and commentary alleging stablecoin fragility raised questions about funding plumbing. XRP‑specific flows were notable — reports cited more than $2.6B in dumps by large holders and a separate $4B whale sell‑off in November — yet some institutional analysts remain bullish on longer horizons; Standard Chartered analysts were reported as forecasting a possible XRP market‑cap catch‑up to Ethereum within years.
Operational implication for treasuries and traders is clear: cross‑asset macro calendar events, concentrated leverage in perpetuals and low volume windows materially increase tail risk.
