Bitcoin slides below $86,000, ether falls as traders rotate into safer assets

Bitcoin, Ethereum and other major cryptocurrencies fell Monday evening, with the world’s largest cryptocurrency sliding below $86,000 as traders rotated into safer assets.

Bitcoin dropped 4.4% in the past 24 hours to $85,617 as of 11:30 p.m. ET Monday, and ether slipped 6.5% to $2,915, according to The Block’s price page. BNB fell 4.2%, XRP lost 6.7%, and Solana declined 4.5%.

Rick Maeda, research associate of Presto Research, said there was no obvious crypto-specific catalyst behind the move, but the crypto sell-off mainly coincided with the U.S. cash equity open, “where stocks opened lower and dragged risk assets with them.”

The S&P 500 lost 0.16%, while the Nasdaq Composite fell 0.59%. The Dow Jones Industrial Average edged down 0.09%.

“Liquidity has been thinning into year-end, which tends to exaggerate moves, particularly during U.S. trading hours,” Maeda added.

Vincent Liu, CIO of Kronos Research, told The Block that “risk-off” sentiment hit quickly as macro jitters returned and thin liquidity turned each dip into a broader slide. 

“Traders rotated into safer assets,” Liu said. “The Fed cut barely moved the needle against a cautious outlook, and with leverage unwinding and year-end liquidity drying up, selling cascaded into a sharper drop.”

Last week, the Federal Reserve announced a 25 basis point rate cut, prompting analysts to assess the impact of the central bank’s third cut this year. The Block has reported that a so-called “Santa rally” now appears unlikely, as bitcoin continues to fade below key resistance levels following the rate decision.

“With key U.S. inflation data due later this week, positioning has also been more cautious, leaving prices more sensitive to relatively modest flows,” said Maeda of Presto.

Mining shutdown in Xinjiang

Crypto trader “NoLimit” suggested on X that Monday’s crypto price drop may be linked to a recent mining-rig shutdown in China’s Xinjiang region.

Jianping Kong, chairman of Nano Labs and a former co-chair of Canaan’s board, said on X on Monday that at least 400,000 mining rigs recently went offline in China. He cited estimates showing the network hashrate fell by roughly 100 exahashes per second, or about 8%, from the day before.

Kong also said over the weekend that crypto mining farms in Xinjiang were shutting down machines one after another. China has recently tightened its crypto ban on the mainland, with its central bank pledging in late November to “severely crack down on illegal and criminal activities.”

“This [shutdown] comes after China’s mining share had quietly rebounded into the mid-teens in recent months, largely driven by cheap power and excess data-center capacity in western provinces,” said Min Jung, research associate of Presto. “The speed of enforcement shows that this rebound was always fragile and dependent on staying out of public view.”

However, Jung said there is no clear evidence that BTC miners from Xinjiang have sold large quantities of bitcoin recently.

Liu of Kronos said that China’s mining crackdown could weigh on bitcoin’s hashrate in the short term, triggering brief sell pressure, but added that the impact is likely temporary and fundamentals remain intact.

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