Have you ever watched almost ten grand vanish from a single asset in the space of a couple of hours and still managed to keep your breakfast down? That was the crypto market last night.
Bitcoin was sitting pretty around $92,000, people were already sketching $100k Christmas trees on charts, and then—bam—three separate hammers dropped at basically the same moment. By the time most of Europe was pouring morning coffee, BTC had kissed $84,000 and over half a billion dollars of leveraged positions had been wiped out.
It felt less like a correction and more like someone yanked the plug on the entire risk-on bathtub.
What Actually Happened Overnight?
Three distinct shocks hit the market almost simultaneously. Any one of them would have been enough to cause a nasty red candle. All three together? Absolute carnage.
1. The Bank of Japan Just Turned Hawkish—Fast
Japanese government bond futures started sliding hard in the Asian session. The 2-year JGB yield punched above 1% for the first time since 2008. That might sound tiny to an American ear, but in Japan that’s basically financial Armageddon.
Traders immediately priced in something like an 80% chance of a December rate hike from the Bank of Japan. And if you’ve been in crypto for more than five minutes, you know what that means for the yen carry trade.
For years, people have been borrowing basically free money in yen, swapping it into dollars, and piling into anything with yield or upside—stocks, tech, and especially Bitcoin. A sudden BOJ hike threatens to reverse that flow. Yen strengthens, carry unwinds, risk assets get crushed.
“These days, Bitcoin reacts to the whole central-bank landscape, not just one player.”
– Market analyst speaking to Bloomberg
Remember when we used to joke that Bitcoin only cared about Jerome Powell’s eyebrows? Those days are gone. Crypto has grown up, and now it gets punished by every central banker on the planet.
2. The Giant Holder Facing a Potential Forced Sell
One corporate treasury has been on an absolute buying tear for years and now holds well north of $50 billion in Bitcoin. Lately its stock has been trading at a shrinking premium to the value of those coins.
On Friday the CEO went on a podcast and said—very calmly—that if the ratio between enterprise value and Bitcoin holdings ever fell below 1.0, they would mathematically have to consider selling coins to keep paying the dividend. He literally said the math side of him would win over the emotional side.
That interview dropped right before the weekend. The ratio sat at roughly 1.2 coming into Monday. After the overnight plunge? It’s knocking on the door.
Nobody knows if they’ll actually pull the trigger, but the market doesn’t need certainty to panic. The idea that the most vocal Bitcoin maximalist corporate treasury might become a seller is psychological napalm.
3. China Reminds Everyone It Still Hates Crypto
Just when you thought Beijing had bigger fish to fry, twelve government agencies including the central bank put out a fresh statement over the weekend: virtual currency speculation is back, it’s illegal, and we’re going to crack down again.
They banned trading in 2021, then mining, then basically anything that even smelled like crypto. Apparently some activity “resurfaced,” so here comes another round.
Realistically, China’s influence on day-to-day price action has shrunk massively since the mining exodus. But headlines like that still trigger muscle memory selling from 2017-2018 veterans. And algos don’t read nuance—they see “China ban” and hit the red button.
The Damage in Numbers
- Bitcoin fell from ~$92,000 to $84,000 in hours
- More than $539 million liquidated across exchanges
- Roughly 90% of wiped positions were long
- Ethereum sliced straight through $3,000 again
- Altcoins down 15-30% on average
- Over 180,000 traders rekt
I’ve been through enough cycles to know that when liquidations cluster this hard and this fast, the move usually overshoots. And boy did it overshoot.
But here’s the thing that actually surprised me: the speed of the bounce. By the time I finished typing the first draft of this article, Bitcoin was already clawing its way back above $87,000. That’s not the behavior of a market that’s truly broken.
Is This the Flush We Needed?
Look, I’m not going to sugarcoat it—December started ugly. November was already the worst month for Bitcoin since the 2018 bear market. Weak ETF flows, no real dip-buying frenzy, leverage had crept back in. The setup was screaming for a washout.
And washouts hurt. They’re supposed to hurt. They scare the tourists, rinse the leverage, and transfer coins from weak hands to stronger ones.
In my experience, the most vicious one-day drops often mark the exact moment the bottom is put in. Not because the news gets better immediately, but because everyone who was going to panic has already panicked.
“The biggest concern is the meagre inflows into Bitcoin exchange traded funds and absence of dip buyers.”
– APAC trading lead at a major crypto prime broker
Fair point. But absence of dip buyers at $90k doesn’t mean absence of dip buyers at $84k. Psychology flips fast at round numbers and previous highs.
Key Levels I’m Watching Now
Short term, $80,000 feels like the line in the sand. That’s the November low and roughly where the 111-day moving average sits. Lose that convincingly and yeah, we could be looking at a deeper correction—maybe even retest the $70k zone.
But flip $90,000 back into support? Different story entirely. That would confirm the overnight move as a classic deviation flush and set up a run toward new highs before year-end.
Longer term, nothing that happened overnight changes the macro setup. The Fed is still widely expected to cut again in December. Global liquidity trends remain constructive. Institutional adoption continues. We just got reminded—hard—that crypto is now a global macro asset, not an isolated toy.
Final Thoughts
Crypto has matured to the point where it gets hit by the same bats that hit the Nasdaq, emerging markets, and gold. That’s actually a sign of success, even if it stings right now.
Overnight felt like three black swans landing at once. But markets have short memories. Give it a few days, maybe a week, and people will be debating whether this was the exact capitulation event that clears the path for the next leg up.
I’ve seen this movie before. The ending is usually green.
Stay nimble, keep some dry powder, and maybe—just maybe—thank the BOJ for the discount.
