Bitcoin crashes to $86,000 as over $1 trillion wiped out from crypto markets

The crypto market’s downturn that started last week intensified on Wednesday as Bitcoin sank to its lowest level in seven months, extending a wipeout now exceeding $1 trillion across digital assets. The latest slide has rattled every layer of the crypto economy — from retail traders chasing dips to publicly traded firms holding BTC on their balance sheets.

Bitcoin, the world’s largest cryptocurrency, briefly touched $86,376.05 before managing a mild rebound early Thursday, but the damage was already done. Liquidity has thinned, sentiment has cracked, and a series of macro shocks is shaping what many analysts now call the most significant correction since 2022.

“The largest cryptocurrency fell to as low as $88,522 before recovering some ground early Thursday, with the latest rout hitting investors big and small — from retail dip‑buyers to digital‑asset treasury firms whose stock premiums are vanishing,” Bloomberg reported. 

Bitcoin has recovered some ground and is now trading at $86,856.02.

Below’s how Bitcoin Magazine described today’s crypto bloodbath:

“The price of Bitcoin today is $86,935, with a 24-hour trading volume of 96 B. BTC is -3% in the last 24 hours. It is currently -6% from its 7-day all-time high of $92,944, and 0% from its 7-day all-time low of $86,954. BTC has a circulating supply of 19,950,600 BTC and a max supply of 21,000,000 BTC. The global Bitcoin market cap today is $1,733,152,200,304, a -3% change from 24 hours ago.”

Long-Term Holders Capitulate as ETFs Face Heavy Outflows

Fresh data shows investor withdrawals from US spot Bitcoin ETFs hitting their worst levels since February. At the same time, long-term holders — typically the most resilient segment of the market — have reportedly sold off 815,000 BTC in the last 30 days.

That shift signals deeper concern beneath the surface. These are not speculative traders flipping positions. They are the historical “strong hands” whose selling often marks a loss of confidence in near-term direction.

Adding to the pressure, expectations for a Federal Reserve rate cut in December have dropped to roughly 51%, dampening risk appetite across the board.

Bitcoin Leads the Slide as Volatility Spikes

The downturn accelerated as Bitcoin fell below the $90,000 mark, triggering automated sell orders and cascading liquidations across exchanges. Trading volume surged above $86 billion, highlighting how skittish the market has become.

Ethereum and Solana mirrored the move, sliding sharply as capital fled to stablecoins like USDT and USDC — a classic defensive rotation during periods of fear.

XRP Sinks as ETF Hype Meets Market Reality

XRP dropped to $2.05 even as anticipation around new XRP ETFs reached peak levels. Strong inflows and heavy trading activity weren’t enough to counter the broader risk-off mood.

Its seven-day chart shows a steady drift downward with investors securing profits ahead of the ETF launches — a reminder that macro sentiment can outweigh project-specific catalysts in strained markets.

Macro Shock: US Unemployment Jumps to 4.4%

The biggest blow came from an unexpected spike in the US unemployment rate to 4.4%, the highest in four years. The number caught markets off guard and raised fresh concerns about a weakening labor market and slowing economic activity.

Yet in a twist, US stock futures soared, creating a sharp divergence between equities and crypto.

Why Stocks Are Pumping While Crypto Is Dumping

The contradictory reaction stems from expectations around Federal Reserve policy.

A softer labor market pushes the Fed closer to cutting rates. Rate cuts usually lift risk assets — but crypto often reacts faster and more emotionally than equities. Historically, digital assets tend to sell off sharply before stabilizing once policy direction becomes clearer.

This time, crypto traders are taking the unemployment spike as a warning sign, while equity traders — particularly in tech — view it as a catalyst for easier monetary policy ahead.