Bitcoin Slips Below $87K in Flash Crash Wiping Out One Week of Gains

TLDR

Table of Contents

Bitcoin plunged below $87,000 in a flash crash that wiped out a week’s gains.
$400 million in leveraged long positions were liquidated in under 60 minutes.
Crypto market cap dropped 4% to $3.04 trillion amid a rapid Bitcoin selloff.
Bitcoin still holds 57.1% market dominance despite recent market volatility.

Bitcoin briefly dropped below $87,000 on December 1, causing a sharp selloff that erased a full week’s worth of gains in a single session. The sudden fall led to over $400 million in leveraged long positions being liquidated in less than one hour. The broader cryptocurrency market followed, with the global market capitalization falling by 4% to $3.04 trillion.

Market analysts attributed the move to a combination of high leverage levels and thin weekend liquidity. There was no specific news event linked to the drop, suggesting a broader structural issue may still be present in the crypto market.

High Leverage and Weekend Liquidity Cited for Sudden Drop

Data from multiple trading platforms reported that $400 million in long positions were liquidated within 60 minutes of Bitcoin’s sharp price decline. This rapid selloff pushed prices under the key $87,000 level before recovering slightly to around $87,200–$87,400.

The Kobeissi Letter noted, “This crypto bear market is still structural in nature. We do NOT view this as a fundamental decline.” Analysts observed that Bitcoin fell nearly $4,000 in minutes, which triggered a series of forced liquidations across trading platforms.

Market participants pointed to record levels of leverage and lack of volume over the weekend as core reasons for the rapid price action. Analysts continue to warn that these conditions can lead to fast-moving corrections.

Support at $80,000 Watched Closely Amid Bearish Price Patterns

Bitcoin had previously recovered to above $90,000 in late November after a dip earlier that month. However, the recent drop has brought attention back to a key support level near $80,000.

Some analysts are drawing comparisons to April 2024, when Bitcoin rebounded to $70,000 before falling to $57,000 by May. Similar patterns of quick recoveries followed by deeper corrections are raising caution among traders.

Korbot Labs mentioned that the current price movement mirrors previous downtrends. “If we break below $80K, a drop to $48K cannot be ruled out,” one analyst noted. A move to $48,000 would represent a 45% fall from current levels.

Market Rotation Into Traditional Safe-Haven Assets Like Silver

While Bitcoin experienced heavy selling, silver prices surged, contributing to discussions about asset rotation. Some analysts believe capital is flowing out of digital assets and into traditional stores of value.

According to market observer Macrobysunil, “Money is choosing real assets over speculative assets.” Silver’s rally came during the same session that Bitcoin erased a week’s gains. This view supports the argument that investors are reducing risk exposure and rotating funds into metals like silver.

Despite this shift, Bitcoin maintains a 57.1% market dominance, with Ethereum holding 11.3%. This suggests that while some capital may be leaving digital assets, Bitcoin continues to lead within the space.

Trading Volume Surges as Investors Adjust Positions

Trading activity increased during the selloff, with volumes rising to over $110 billion across major platforms. Both retail and institutional investors appeared to be repositioning in response to the sudden move.

Technical indicators now show critical support levels near $87,000 and more closely at $80,000. Analysts are watching whether Bitcoin can stabilize above these points or face further downside pressure.

At the time of writing, Bitcoin was trading in a narrow range above $87,000. If support holds, short-term recovery is possible. But if it breaks below $80,000, deeper corrections could follow.