Bitcoin plunges to $86,000, $140 billion wiped off crypto market; ETH, ADA, other tokens down as well

Why is Bitcoin price falling?

Bitcoin has plunged more than 5 percent in the past 24 hours and hovered around $86,316 on December 1 at around 9.22 am (IST) in a wider weakness in the crypto market, which hit other coins as well.

In a volatile morning trade, the bitcoin fell to a low of $85,800 and touched a high of $91,593.

Bitcoin was holding $91,000 for a few days before dropping sharply. The drop triggered a wider sell-off that wiping out nearly $140 billion off the crypto market cap in the past few hours.

Crypto analysts say traders are cautious ahead of US Federal Reserve chairman Jerome Powell’s remarks later in the day, which could shape expectations for the upcoming FOMC meeting.

According to data from the CME FedWatch tool, the likelihood of Fed lowering interest rates to 350 to 375 basis point has risen to 87.4 percent from 71 percent a week ago.

On online polling platform Myriad, 73 percent expect the bitcoin to touch $100,000, while the remainder think the cryptocurrency will dip to $69,000.

"Despite the pause in momentum, bitcoin ETFs have posted their first week of net inflows since October, signalling a potential revival in institutional demand. Strengthening liquidity and improving market depth also support a constructive outlook," said Akshat Siddhant, lead quant analyst, Mudrex. “If sentiment stabilises, BTC could attempt its next leg higher. For now, $85,000 serves as key support, while $92,400 remains the immediate resistance.”

Volatile market 

The world’s most valuable cryptocurrency plunged to $90,316 and peaked at $91,965 in the previous session.

Bitcoin touched $126,000 in October during the market's peak performance period. It fell to its lowest in April, when its price hovered around $75,000 level.

"On the macro side, a key shift arrives today as the Fed ends Quantitative Tightening, removing a major liquidity drain and potentially improving overall conditions for risk assets. BTC has now cleared major long liquidations, and holding $86K–$87K keeps the door open for a move toward $89K–$90K," said CoinSwitch Markets Desk.

Volatility has been observed across other tokens, too, with ETH down 5.87 percent, BNB 5.18 percent, ADA 7.75 percent, and SOL 6.87 percent in the last 24 hours. The top gainers include Memecore by over 10 percent, followed by JUST by over 7 percent, and MYX Finance is up by 5.72 percent On the other hand, Zcash dropped by 17.13 percent, Ethena by over 14 percent and Starknet by 13.34 percent.

“The market sentiment continues to remain under fear. In the meantime, China’s Central Bank has reaffirmed its crypto ban and warned it will intensify its crackdown on stablecoins,” said CoinDCX Research Team

Here are the prices of top cryptocurrencies on December 1 at 9.22 am:

“High volume with slight price weakness typically reflects cautious sentiment: traders are active, but conviction is limited. This often indicates rotation, profit-taking, or waiting for a macro catalyst to increase prices. Overall, the market is balanced but hesitant, with volume showing interest while price action signals uncertainty,” said WazirX Trading Desk.