Cryptocurrency markets experienced a sharp sell-off on Tuesday, pushing Bitcoin down to $86,000 and triggering mass liquidations across major digital assets. The world’s largest cryptocurrency fell roughly 4%, extending its decline from the record high of $126,000 set in October. Ether also slid over 4% below $3,000, while tokens across decentralized finance (DeFi), centralized finance (CeFi), and Layer 1 and Layer 2 networks posted significant losses.
The sudden downturn led to $583 million in forced liquidations over 24 hours, with long positions bearing the brunt of the sell-off. Tokens tied to decentralized physical infrastructure networks (DePIN) were among the hardest hit, dropping an average of 6%. Market sentiment plummeted alongside prices, with the Crypto Fear & Greed Index falling to 11, signaling extreme fear and panic among traders.
Technical indicators are reinforcing bearish pressure, as 75 of the top 100 cryptocurrencies now trade below both their 50-day and 200-day moving averages—a key signal of sustained downtrends. Major assets like Bitcoin, Ether, Solana, BNB, and XRP, which collectively represent nearly 78% of the $3 trillion crypto market, are underperforming these trend lines, further fueling a cautious market outlook.
Institutional activity mirrors this defensive sentiment. US-based cryptocurrency ETFs saw massive outflows, including $357.6 million from Bitcoin spot ETFs and $224.94 million from Ethereum ETFs. Funds like Fidelity’s FBTC, Bitwise’s BITB, and Grayscale’s GBTC recorded the largest withdrawals, highlighting waning investor appetite as year-end approaches.
Despite the heavy losses, some technical measures suggest the market has not yet fully capitulated. Only eight of the top 100 cryptocurrencies are classified as oversold based on the 14-day relative strength index (RSI), indicating that while prices have dropped, there may still be room for further declines before a more stable rebound occurs. Traders remain cautious, monitoring technical support levels and investor risk sentiment closely.
source: Business day