According to Bloomberg data, Bitcoin fell by as much as 6%, dropping below $86,000 during early Asian trade on Monday, while Ether decreased more than 7% to around $2,800. Other major tokens followed suit, with Solana losing 7.8%.
The digital asset market remains unstable following a prolonged period of selling that began in early October, when leveraged positions totaling $19 billion were liquidated shortly after Bitcoin reached a record high of $126,251.
In November, Bitcoin lost 16.7% of its value, but recouped some losses last week as selling eased and the price moved back above $90,000. Monday’s renewed downturn, however, has traders anticipating the possibility of further declines.
Market participants note that the start of December has seen limited investor enthusiasm, with weak inflows to Bitcoin exchange-traded funds and a lack of buyers during price dips. The structural obstacles facing the market are expected to persist through the month, and focus remains on $80,000 as a crucial support level for Bitcoin.
S&P Global Ratings downgraded its stability assessment of USDT, the largest stablecoin, to its lowest rating last week, with the agency warning that a drop in Bitcoin’s value could leave USDT undercollateralized.
The situation was further complicated by the People’s Bank of China (PBOC), which on Saturday released a statement warning about the risks associated with virtual currencies, including stablecoins, and called for increased interagency coordination to combat illegal activities.
According to CoinEx’s chief analyst Jeff Ko, a string of negative developments over the weekend, notably the USDT downgrade and the Chinese central bank’s warning, have heightened pressure on the cryptocurrency market.
