BTC, Ether Lead Crypto Sell-Off, Triggering Broader Risky-Asset Tumble — and It Could Get Worse

Cryptocurrencies dropped sharply on Monday, reigniting the broad risk-off move that first gained force in late November.

Bitcoin slid 6% to below $86,000, while Ether tumbled more than 7% to around $2,800. Most major tokens traced similar declines, with Solana losing roughly 7%.

The crypto downturn spilled over into broader risk assets, as Nasdaq 100 futures fell more than 1%, while S&P 500 futures dipped 0.78%.

The market remains rattled after a prolonged unwinding of leverage that began in early October, when approximately $19 billion in levered Bitcoin bets were wiped out just days after the token hit its all-time high of $126,251. Bitcoin shed 16.7% in November before staging a brief rebound above $90,000 late last week.

The sell-off pushed BTC to retest the previous low at $80K, during which the broader market index also hit its session low. But if BTC breaks below this psychological level, the downturn could worsen further.

The People's Bank of China issued a statement Saturday warning of illegal activities tied to digital currencies, hitting Hong Kong–listed crypto-related equities during Monday's session.

With Monday's renewed wave of selling, traders are preparing for further downside.

"It's a risk off start to December," said Sean McNulty, APAC derivatives trading lead at FalconX. "The biggest concern is the meagre inflows into Bitcoin exchange traded funds and absence of dip buyers. We expect the structural headwinds to continue this month. We are watching $80,000 on Bitcoin as the next key support level."

"At the macro level, rising Japanese government bond yields added further downside pressure, as investors assessed the potential acceleration of the yen carry-trade unwind, a dynamic that historically weighs on global risk assets, including crypto," said Jeff Ko, chief analyst at CoinEx.

The upcoming week will provide an important reading on U.S. economic momentum as officials evaluate the interest-rate trajectory heading into 2026. Market expectations hinge on whether the Federal Reserve continues its rate-cutting path. Adding to the sensitivity, U.S. President Donald Trump on Sunday said he had already selected his nominee for the next Fed chair — emphasizing he expects that individual to deliver rate cuts.

Investors were also processing remarks from Strategy Inc. Chief Executive Officer Phong Le, who said on Friday that the company could liquidate Bitcoin if its mNAV — a ratio of enterprise value to Bitcoin holdings — fell below zero. "We can sell Bitcoin and we would sell Bitcoin if we needed to fund our dividend payments below 1x mNAV," he said, noting it would be a last-resort decision. Strategy, which holds a $56 billion Bitcoin reserve, has seen its mNAV drop to 1.19, according to data on its site.

Meanwhile, S&P Global Ratings last week downgraded its stability assessment of USDT, the world's largest stablecoin, to the lowest tier, warning that a decline in Bitcoin's value could leave the token undercollateralized. The PBOC's renewed warning over the weekend — urging tighter inter-agency coordination to crack down on illegal virtual-currency activity — compounded the uncertainty.

Ko of CoinEx said that "a series of bearish developments over the weekend," including the USDT downgrade and PBOC warning, had put renewed pressure on digital assets.