Bitcoin (BTC) dropped sharply on Sunday night, falling below $86,500 as investors exited risk assets following a hacking incident involving Yearn Finance and renewed macroeconomic uncertainty. The price fell 4.8% in the past 24 hours to $86,310, according to The TradingView data.
Other major cryptocurrencies also recorded notable declines. Ether (ETH) fell 5.8% to $2,806, XRP declined 6.7% to $2.01, and Solana (SOL) slid 6.73% to $126. The mass sell-off during the Sunday evening session erased more than $144 billion in the total crypto market capitalization, representing a 5% decline in just a few hours.
Bitcoin’s price plunged from around $91,300 to nearly $86,000 within three hours, marking one of the largest single-session drops in November. The decline reversed a brief recovery that had lifted BTC above $90,000 last week and returned it to levels last seen during the mid-month downturn.
Analysts see deleveraging and macro pressure as key drivers
BTC Markets crypto analyst Rachael Lucas said that the move reflected renewed risk aversion rather than a major shift in fundamentals.
“It’s more about positioning than fundamentals,” Lucas said. “December cut odds have climbed to around 85%, but the market priced that in months ago during the September-October rally.”
Lucas explained that traders face a difficult combination of factors, including persistent inflation and uncertainty surrounding trade tariffs.
“Sticky inflation and tariff chatter” have limited risk appetite, she said, adding that roughly $3.5 billion in outflows from bitcoin exchange-traded funds (ETFs) in November and significant liquidations of leveraged positions have driven a “classic deleveraging spiral.”
“BTC is behaving like a high-beta risk asset, it needs a real liquidity flood, not just a dovish whisper,” Lucas said.
Yearn Finance hack worsens sell pressure
Market sentiment worsened after reports confirmed that Yearn Finance, a DeFi aggregator, had been hacked. Attackers drained its yETH token pool and transferred 1,000 ETH to Tornado Cash. The exploit added further pressure to an already fragile market and amplified fears about contagion across decentralized finance protocols.
Earlier last week, South Korean crypto exchange Upbit also reported a security incident, raising broader concerns about vulnerabilities within the digital asset sector.
According to data from CoinGlass, more than 219,000 traders were liquidated in the past 24 hours, with total liquidations reaching $636 million. Approximately 90% of those were long positions, predominantly in Bitcoin and Ether.
Technical levels and potential outlook
Lucas said Bitcoin continues to face critical support around $87,000.
“$87,000 is the line in the sand, held overnight and we could see further upside,” she said. “Lose that and $80,400 becomes the next magnet, with a liquidity sweep toward US$75K if it breaks.”
Despite the downturn, the analyst pointed to the possibility of a recovery if the Federal Reserve cuts interest rates in December.
“The Fed’s rate cut, if it happens, could help bitcoin rally 10% to 15% in the following week toward $95,000 to $100,000,” Lucas said. “If Fed Chair Jerome Powell gives a further dovish comment on top of the cut, bitcoin could surge toward $110,000 to $120,000.”
However, she warned that a “sell the news” scenario could follow if the Fed signals a pause rather than a sustained easing cycle.
Analysts expect market focus to shift toward Federal Reserve decisions
Crypto venture firms and traders now view macroeconomic clarity as the most important market catalyst through the end of 2025.
Boris Revsin, general partner and managing director at Tribe Capital, said the market has priced in an expected December rate cut but may underestimate how dovish policy could become under new central bank leadership. On Sunday, President Donald Trump announced that he had chosen a nominee for the next Federal Reserve Chair, though he did not reveal the name. Bloomberg previously reported that Kevin Hassett, the current Director of the White House National Economic Council, is a leading candidate.
Gunel Ismayilova
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