Digital assets kicked off December with a sharp downturn, reigniting a selloff that had briefly paused last week. The broader crypto market saw steep declines across major tokens, signaling renewed caution among traders.
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Bitcoin retreated by around 7% in early New York trading, dipping below the $85,000 mark. Ether mirrored the slump with a similar drop to roughly $2,800, while other large-cap tokens, including Solana, also saw notable declines. The risk-off tone suggests traders are increasingly wary of further downside after weeks of heightened volatility.
The broader context explains the fragility. The crypto market has struggled to recover from a significant liquidation event in October, when leveraged positions worth roughly $19 billion were flushed out shortly after Bitcoin reached a record high above $126,000. Although November saw Bitcoin slide nearly 17%, the token had begun stabilizing and even climbed back above $90,000 last week. That tentative recovery, however, lost momentum as new selling pressure emerged to open the month.
Market participants say sentiment has shifted decisively cautious. The lack of meaningful inflows into spot Bitcoin exchange-traded products and a noticeable absence of aggressive dip buyers are raising concerns. Traders are now watching the $80,000 range as the next significant support level for Bitcoin. If selling accelerates, a deeper retracement could unfold.
Macro forces are compounding the pressure. Global markets also opened the month on uncertain footing. Asian equities wavered after their strongest weekly performance in nearly two months, U.S. equity futures softened, and Japanese stocks fell while the yen strengthened. A clear signal from Japan’s central bank toward potential rate hikes added additional stress, especially as the unwinding of yen-funded carry trades has historically weighed on risk assets, including crypto.
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Investors are also preparing for key U.S. economic data expected this week, which could shape expectations around future interest rate decisions. With policymakers evaluating the path toward 2026, rate projections remain central to market behavior. Comments from U.S. leadership regarding the next Federal Reserve chair appointment only added to the watchfulness.
Additional pressure came from corporate commentary within the crypto space. A major Bitcoin-holding company signaled it might sell portions of its holdings under certain financial conditions, stirring fresh uncertainty given its significant market footprint.
Overall, the first trading session of December underscored a fragile environment in which global macro shifts, thinning liquidity, and structural market concerns continue to exert intense pressure on digital assets.
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