Bitcoin slips under $86,200 as market sentiment weakens and deleveraging deepens

Bitcoin extended its recent decline on Monday morning, dipping below $86,200 as macroeconomic uncertainty and a major DeFi hack triggered renewed risk aversion across crypto markets.

The asset traded at $86,035 at the time of writing, down 5.4% in the previous 24 hours, according to CoinMarketCap.

The sell-off spilled over into the broader market, with ether falling 6.19% to $2,815, XRP sliding 7.5% to $2.04, and Solana dropping 7.3% to $126.

The move erased Bitcoin’s five-day recovery above $90,000, marking a sharp reversal from the highs of the previous week.

The entire crypto market shed more than 4.5% in just four hours, wiping out over $144 billion in value.

Deleveraging, ETF outflows, and Yearn Finance hack weigh on sentiment

Analysts attribute the downturn to a buildup of leverage unwinding and continued macroeconomic pressures.

Monthly outflows from bitcoin ETFs reached $3.5 billion in November, alongside billions in leveraged long liquidations.

Rachael Lucas of BTC Markets described the sell-off as a “classic deleveraging spiral,” driven more by positioning than fundamentals.

While traders expect a 25 basis point US Federal Reserve rate cut in December, she noted that markets priced in this outcome months in advance.

Adding to risk-off momentum, DeFi protocol Yearn Finance suffered a security breach on Sunday, with hackers draining its yETH pool and sending 1,000 ETH to Tornado Cash.

Jeff Mei, COO of BTSE, warned that the incident could spark broader withdrawals and instability across DeFi platforms, given Yearn’s integration with Aave, Compound, and Curve.

Market volatility accelerated into the evening, with bitcoin falling from $91,300 at Sunday evening 7 pm EST to near $87,000 within three hours.

More than 180,000 traders were liquidated in 24 hours, totaling $539 million in forced exits, almost 90% of them long positions.

Worst November since 2018 as trading volumes fall

November marked bitcoin’s weakest monthly performance of the year, closing down 17.49%.

It was the harshest November since 2018, when bitcoin fell more than 36% amid a prolonged bear market.

Despite the drop, some analysts remain cautiously optimistic.

Market watcher “Sykodelic” argued that liquidity was cleared early in the month, noting that downside sweeps historically precede recovery phases.

Trading volumes also reflected weakening participation.

Centralized exchange spot volume fell to $1.59 trillion last month, the lowest since June and a 26.7% decline from October.

Binance remained the market leader at $599.34 billion, followed by Bybit, Gate.io, and Coinbase.

Decentralized exchanges saw similar cooling, with monthly volume sliding to $397.78 billion, also the weakest since June.

Vincent Liu of Kronos Research attributed the downturn to fading momentum post-rally and tighter trading ranges.

The DEX-to-CEX volume ratio fell to 15.73%, down from 17.56% in October, indicating increased preference for venues with deeper liquidity.

Key levels ahead: $87,800 resistance, $86,000 support

Bitcoin technical indicators show weakening momentum with hourly MACD in the bearish zone and RSI below 50.

Immediate resistance sits near $87,850 and $89,200, with potential recovery toward $90,650 if upside breaks hold.

Failure to reclaim those levels could expose supports at $86,500, $86,000, and potentially $85,500, with bigger risk down to $83,500 or $82,200.

For now, market direction hinges on liquidity trends, macro shifts, and ETF flows — with analysts cautioning that a rate cut alone may not be enough to reignite sustained upside.

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