Crypto Market Meltdown: $1B Liquidated as Bitcoin Slides Again

On Monday, the market experienced another severe collapse, wiping away about $1 billion in leveraged crypto trades. Bitcoin is down 6% to $84,810 on Monday, bringing its year-to-date decline to more than 8%. Smaller altcoins have fared far worse, with a MarketVector index tracking the bottom half of the top 100 tokens down nearly 70% this year. Much of the market’s weakness dates back to early October, when $19 billion in leveraged bets were liquidated in response to President Donald Trump’s tariff threats, which rocked global markets.

Traders utilise liquidation data to analyse system leverage, identify risk appetite, and determine whether a market wipeout has effectively removed excess speculation. However, the numbers they rely on may be incomplete. According to industry sources, exchanges limit the amount of liquidation data they release, making it difficult for traders to gauge market leverage.

ETF Outflows, BOJ Rate Signals, and Saylor’s $1.4b Reserve Shake Sentiment

As December begins, investors are focusing on the next steps for global monetary policy,” said Karim Dandashy, an over-the-counter trader at cryptocurrency trading firm Flowdesk. “With the Fed now expected to be cutting again after a brief panic last week that saw December odds drop to 30%, and now the BOJ (Bank of Japan) looking more likely to be raising rates to counter the moves we’ve seen in JGBs (Japanese Government Bonds).”

Michael Saylor’s Strategy MSTR -3.22%  announced a $1.4 billion reserve on Monday to fund dividends and interest payments without selling any of its $56 billion in Bitcoin, adding pressure to the crypto market. Its mNAV (Market-to-Net Asset Value)—an essential valuation metric that compares the company’s enterprise value to its Bitcoin holdings—fell to approximately 1.11, sparking concerns that it may turn negative. As a result, Strategy shares have dropped by more than 7%.

The US Spot ETF also added pressure to the crypto market. The US spot Bitcoin ETFs received a modest $70 million last week, following outflows of almost $4.6 billion over the previous month, according to Bloomberg statistics. Most of the pressure has come from the iShares Bitcoin Trust, where investors have withdrawn money for five weeks in a row, the most extended withdrawal sequence since the fund’s inception in January 2024.