XRP News Today: December's $638M Crypto Liquidations Signal Leverage Crisis Amid Regulatory Turbulence

The crypto market experienced a dramatic selloff over the past 48 hours, with $320 million in leveraged positions liquidated in just four hours-primarily long positions-as volatility intensified amid shifting macroeconomic sentiment and regulatory uncertainty. Data from Coinglass and LookOnChain revealed that nearly $296 million in long positions were unwound, dwarfing the $24.39 million in short liquidations. This marked a sharp escalation in risk-off behavior, compounding a broader $638 million in liquidations recorded across major exchanges on December 1, with long positions accounting for 90% of the total.

The sell-off followed a week of declining investor confidence, as global crypto market capitalization contracted by 4.82% to $2.94 trillion, with Bitcoin (BTC) dropping below $86,000 for the first time since late October. Analysts attributed the downturn to a confluence of factors, including rising expectations for a Bank of Japan rate hike in December and thin liquidity in key altcoins. "Market conditions such as today's downturn underscore how quickly sentiment can shift in the digital-asset landscape," said a GeekStake spokesperson, noting the amplified volatility from leveraged trading.

BitMine Immersion (BMNR), the largest Ethereum treasury holder with 3.73 million ETH, announced a 39% increase in weekly ETH purchases, signaling continued institutional confidence in the asset. The company, which holds $12.1 billion in crypto and cash, emphasized its staking infrastructure as a "best-in-class" solution for secure validator networks, with deployment expected in early 2026. Meanwhile, institutional outflows accelerated, with crypto ETFs hemorrhaging $3.48 billion in November, and Cardano (ADA) seeing $19.3 million in outflows as capital concentrated in dominant assets.

Exchange data highlighted the severity of the liquidations. Binance, Hyperliquid, and Bybit each recorded over $160 million in forced closures, while decentralized platforms like Uniswap saw volumes collapse to $79.98 billion in November https://www.coindesk.com/markets/2025/12/01/bitcoin-drop-ends-up-liquidating-usd500m-bullish-bets-in-early-asia-trading. The liquidations disproportionately impacted altcoins, with Solana (SOL), XRP, and BNB falling between 4% and 7% as traders scrambled to cut losses. XRP, however, saw a paradoxical 92% surge in trading volume to $3.92 billion, reflecting speculative positioning despite its 6.74% price drop.

Regulatory developments further fueled uncertainty. The U.S. Securities and Exchange Commission's (SEC) Project Crypto and the proposed GENIUS Act were described by BitMine's Thomas Lee as "transformational" for financial services, drawing parallels to the 1971 end of the gold standard. Meanwhile, Ripple's recent approval of an expanded payment license in Singapore and the upcoming launch of multiple XRP ETFs added layers of complexity to market dynamics.

Analysts warned that the liquidations underscored the fragility of leveraged positions in a high-volatility environment. "This distribution points to a shift where heavy long exposure is unwinding in tandem with price moves," noted Coinglass , urging traders to reassess margin requirements and liquidity risks. With the Federal Reserve's policy outlook and Japan's monetary decisions looming, the crypto market remains poised for further turbulence in the coming months.