Bitcoin slides below $86,500, wiping out $144 billion in crypto market cap

Bitcoin fell below $86,500 on Sunday night, trading at $86,310, which represented a 4.8% drop over 24 hours. This decline, attributed to macroeconomic pressure and a hack on the DeFi protocol Yearn Finance, caused the entire crypto market capitalization to fall by 4.5%, erasing over $144 billion. Other major cryptocurrencies like Ether, XRP, and Solana also saw significant declines. Analysts suggest the market is currently driven by positioning rather than fundamentals, noting that while expectations for a December Fed rate cut are high, risk appetite is capped by inflation concerns and recent ETF outflows. The Yearn Finance exploit exacerbated selling as traders feared further instability in the DeFi space. Key support for Bitcoin is seen around $87,000, with a break potentially leading to $80,400 or $75,000. Analysts believe a dovish Fed policy or clarity on geopolitical issues will be necessary to reignite upward momentum, with some anticipating a bounce if President Trump's new Fed Chair pick signals continued liquidity flow.

(Source：The Block)