Analysts Reveal The Spark Behind Bitcoin’s Flash Crash
Bitcoin slid sharply on Sunday after failing to push above a key ceiling near $91,000, dropping almost 6% in a matter of hours and touching $85,800 on Coingecko. The sell-off came after the market posted a positive weekly close — the first after a run of four losing weeks — which briefly looked like a turning point before the rapid move lower.
Liquidations And Trader Losses
Based on CoinGlass data, more than 180,000 traders were wiped out in the last 24 hours, with total liquidations hitting close to $540 million. Almost 90% of that value came from long bets, concentrated in Bitcoin and Ether.
Reports have disclosed that a sudden surge of selling volume triggered a chain reaction, where forced exits multiplied the price fall as margin positions were closed.
Some market commentators pointed to technical quirks as well. The CME gap that traders watch had been filled, and analysts said roughly $400 million of long positions were taken already, adding that downside liquidity was cleared first — a move he described as a useful clean-up for the market.
Crypto’s liquidity issue:
As seen countless times this year, Friday night and Sunday night often come with LARGE crypto moves.
Just now, we saw Bitcoin fall -$4,000 in a matter of minutes without ANY news at all.
Why? Liquidity is thin.
Then, add this to the fact that… https://t.co/BTRNPV8Y5a
— The Kobeissi Letter (@KobeissiLetter) December 1, 2025
The Kobeissi Letter noted the slide arrived without an obvious news trigger and said the pattern has been repeated many times this year, especially around late Friday and Sunday trading windows.
Macro Signals And Volatility
The broader backdrop also weighed on sentiment. Investors are watching possible shifts in Federal Reserve policy, and the prospect of higher interest rates tends to pressure risk assets like Bitcoin.
The token’s intraday range showed a low of $85,400 and a high of $90,600, highlighting how quickly prices are swinging. Average True Range (ATR) sits at 4,423, a sign of elevated day-to-day volatility, while the Relative Strength Index (RSI) is a little over 38, moving toward oversold readings.
November proved rough. Reports show Bitcoin ended the month down 18%, its worst November since 2018, when prices fell 35% that same month.
Still, the asset has gained 10% year-to-date, giving some traders faith that recent weakness is more mechanical than fundamental.
Image: ICO Bench
Market Voices And What They Say
According to CoinGlass and analysts quoted online, the majority of recent liquidations were long positions — a factor that magnified the drop.
Kobeissi argued this episode was structural, tied to crowded positions being unwound, and explicitly stated they did not view it as a fundamental decline. Some analysts remained upbeat, calling the move a positive reset for the month. On social platforms, debate is active about whether this shakeout clears the way for fresh accumulation.
Binance’s CEO Richard Teng has urged diversification during whipping markets, a reminder echoed across trading desks. Policymakers remain the key macro variable: a hawkish Fed tone could extend selling pressure, while a more dovish stance might steady prices.
Traders will watch liquidity levels, open interest, and whether large long squeezes subside, because those factors are likely to dictate near-term direction.
Featured image from Pexels, chart from TradingView
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
