The crypto market recorded $637.57 million in liquidations on December 1, 2025, driven overwhelmingly by long positions and impacting roughly 219,000 traders during a sudden market-wide risk-off shift. Bitcoin fell below $85,653, Ethereum reached $2,807 and XRP touched about $1.91 as macro signals collided with concentrated leverage.
Long-heavy liquidations cascaded across major assets
Trading platforms cleared $567.96 million in long positions versus $69.61 million in shorts, marking one of 2025’s largest single-day leverage purges. The day’s biggest forced closure — a $14.48 million ETH/USDC position on Binance — illustrated the scale of margin stress, while smaller-cap tokens such as SOL, ZEC, DOGE, ADA, BNB and HYPE typically fell between 6% and 10% during the immediate window. Aggregate market value erased roughly $200 billion within hours as stop-loss cascades and margin calls accelerated selling.
The XRP decline contrasted with a significant institutional milestone: multiple spot XRP ETFs launched with strong early activity, including a leading fund that saw about $22 million in volume and over $105 million in initial inflows. Yet these flows were overwhelmed by the liquidation cascade, preventing any stabilizing effect on intraday price action.
Macro signals acted as the principal spark. Comments from the Bank of Japan governor hinting at potential tightening revived fears of a yen carry-trade unwind, a market structure with an estimated $20 trillion in exposure. At the same time, domestic data risks — including an expected ISM Manufacturing PMI near 48.6 and market-implied odds of an 87.4% chance of a 25-bp Fed cut — injected policy ambiguity that amplified risk aversion across assets.
Separate concerns emerged around a major stablecoin’s strategic shift into gold and Bitcoin, a move meant to offset declining interest income but one that reignited questions about reserve stability. Combined with highly concentrated leverage on centralized venues, these structural tensions heightened the speed and depth of the sell-off and exposed single-point fragilities in derivatives clearing systems.
The December 1 episode demonstrated crypto’s acute sensitivity to monetary signals and internal leverage, showing how macro cues can rapidly propagate through centralized trading infrastructures. If current linkages between policy signaling, stablecoin reserve composition and leveraged derivatives persist, recurring stress events are likely until structural leverage and centralization risks diminish.
