$150B Wiped as Bitcoin Slides Below $87K After Japan Yield Shock

Market meltdown in a nutshell

Early on Dec. 1, Bitcoin lost nearly 5% and briefly dipped under $87,000 — a move that vaporized roughly $150 billion of crypto market value in short order. What looked like a tame pullback turned into a head‑spinning dump thanks to a perfect storm: headlines out of Tokyo, paper‑thin order books, and traders who were standing in the wrong place when the music stopped.

If you blinked, you missed it: a fragile, low‑volume market meant a few big sellers and a run on liquidity turned a small technical crack into a proper rout. The result was a large chunk of leveraged positions getting flushed and a pile of liquidations — hundreds of thousands of traders were caught off guard.

The real culprit: liquidity, leverage, and Tokyo

There’s the story you read in one line — yields jumped in Japan — and then there’s the real, messier story under the hood. Japanese government bond yields spiked (the 10‑year climbed to the sort of levels not seen in years and the two‑year pushed past 1%), which suddenly made borrowing yen less attractive and put the yen carry trade on at least a temporary timeout. That repricing rippled into risk assets globally.

But the bigger problem was market structure. Weekly volumes had been sitting at unusually low levels, with average weekly turnover shrinking and major coins trading through much thinner books than usual. Bitcoin trading volumes were substantially down and ETH activity fell even more sharply. That lack of participation made the market extra sensitive: what might have been a little wobble during a healthy week became a full‑blown slide when fewer buyers were around to soak up selling.

At the same time, positioning looked lopsided. Bitcoin players had been trimming risk, while Ethereum desks were piling on leverage despite muted on‑chain activity. Funding rates and open interest painted a picture of Bitcoin coolly unwinding and Ethereum heating up — a mismatch that amplified pain when liquidity evaporated.

Put it together and you get a liquidity event, not a tidy, measured correction. Big traders and research heads described the move as being driven by forced positioning and macro repricing rather than calm, deliberate profit‑taking.

What’s next? levels to watch and the awkward silence on the sidelines

Technically, the sell‑off shoved price below short‑term holder cost bases — a psychological and structural line that separates mild dips from deeper corrections. On‑chain signs also suggest long‑term holders have slowed down their buying, while smaller retail accounts have been inching in at distressed prices. That’s not necessarily bad, but it’s not the same as whales stepping in to defend the tape.

There’s cash parked and ready — stablecoin balances on exchanges have ticked up, which means buyers are waiting in the wings. But during the weekend drop, certain big liquidity sources were largely absent, so that dry powder didn’t get deployed fast enough to stop the slide.

Watch the mid‑$80,000s for the nearest structural support. If Bitcoin can reclaim the low‑$90,000s soon, the panic may cool. If not, the market could seek the low‑$80,000s as the yen carry unwind and thin books continue to play havoc. And because macro prints are coming — jobs numbers, ISM data, and other events — any surprise on the data front could add more volatility to an already twitchy market.

Short version: the headlines from Tokyo lit the fuse, but low liquidity and stretched positioning turned it into a fireworks show. Keep an eye on volume, funding rates, and those key price bands — they’ll tell you whether this is a speed bump or the start of something bigger (probably with more drama).