The cryptocurrency market is experiencing a significant downturn today, December 1, as a recent recovery attempt fades and investors digest a wave of negative news from the United States. This market correction has led to a substantial increase in liquidations across various digital assets.
Market Downturn and Liquidations Surge
Bitcoin (BTC) and a majority of altcoins are currently falling, leading to the liquidation of many bullish positions. In the past 24 hours, total liquidations have surged by 440%, exceeding $781 million. Bitcoin liquidations alone have reached over $311 million within the same period, while Ethereum saw coins worth $167 million liquidated.
These soaring liquidations exert downward pressure on the crypto market by closing existing trades. However, it is important to note that the current liquidation figures are considerably smaller than the massive $20 billion liquidated on October 10.
Negative Headlines Impacting the Market
The crypto market's decline is also attributed to a series of unfavorable news developments. S&P Global has downgraded Tether, a prominent stablecoin, citing concerns about a potential long-term asset mismatch. Arthur Hayes, the founder of BitMEX, has also voiced concerns regarding the risks Tether faces due to its investment strategy in low-interest-rate environments.
The Tether folks are in the early innings of running a massive interest rate trade. How I read this audit is they think the Fed will cut rates which crushes their interest income. In response, they are buying gold and $BTC that should in theory moon as the price of money falls.… pic.twitter.com/ZGhQRP4SVF
— Arthur Hayes (@CryptoHayes) November 29, 2025
Furthermore, the CEO of Strategy has indicated that the company might be compelled to sell its Bitcoin holdings if its enterprise value to diluted net asset value (mNAV) multiple enters negative territory. This would represent a significant divestment, given the company's five-year accumulation of Bitcoin.
The ongoing outflows from spot Bitcoin Exchange-Traded Funds (ETFs) are also contributing to the downturn. Bitcoin and altcoins are experiencing price drops amid these outflows, which reached over $3.5 billion in November. Ethereum funds also recorded their first outflow in several months.
Potential Catalysts for Market Recovery in December
Despite the current market conditions, several factors could potentially drive a recovery in cryptocurrency prices during December. Firstly, data from Polymarket indicates that the probability of the Federal Reserve implementing interest rate cuts in December has risen to nearly 90%.
Additionally, the likelihood of former White House economic advisor Kevin Hassett being nominated as the Fed Chair by Trump has increased. Hassett has previously expressed support for the cryptocurrency industry and advocated for lower interest rates.
Secondly, a potential recovery could be triggered if Bitcoin's price forms a double-bottom pattern. The daily chart suggests that Bitcoin is gradually establishing a double bottom at $80,494, with a neckline identified at $93,185, its peak on November 28. This chart pattern is often indicative of a bullish reversal.
Thirdly, a recovery might occur as the Fear and Greed Index has entered the "extreme fear" zone, falling below 20. Historically, such low levels have preceded the start of new bull runs, as observed in April.
Finally, the market could experience a boost from the anticipated Santa Claus rally, a seasonal trend where assets often see a rebound in the period leading up to Christmas.