What Caused Bitcoin's Sharp Decline Amid Market Fears?

Bitcoin experienced a significant downturn, plummeting over 5% to around $86,000, marking its most severe November since 2018. This decline triggered substantial liquidations, with approximately $539 million wiped from the market, predominantly affecting long positions in both Bitcoin and Ethereum.

Analysts suggest that the selloff was fueled by a sudden influx of selling volume rather than any specific news event. The cryptocurrency market as a whole suffered, with total market capitalization shrinking significantly.

The atmosphere grew increasingly cautious, as fears around potential interest rate hikes from the Bank of Japan contributed to broader concerns about risk assets. As market sentiment shifted to 'Extreme Fear,' traders faced mounting pressures and losses amidst a backdrop of thin liquidity and heightened volatility.