Bitcoin dropped 5%, pulling down Ethereum and XRP. Bitcoin is down 21% in the past month, currently trading at $86,800, 31% below its all-time high. Ethereum and XRP fell 5.6% and 6.5%, triggering $637 million in total crypto market liquidations, with over half in long positions.

The weekend selloff of Bitcoin was driven by outsized long liquidations, causing a cascade effect across markets. Strategy CEO Phong Le’s comments on selling Bitcoin added to the negative sentiment. Despite this, traders remain unfazed, giving a 5% chance of Strategy selling Bitcoin this year.

Concerns about Tether’s solvency if Bitcoin and gold drop by 30% contributed to the crash. Arthur Hayes highlighted the risk, stating that a 30% decline in gold and Bitcoin would make Tether insolvent. Worries about Tether’s stability can widen liquidity premia and increase volatility across crypto markets.

China’s central bank’s declaration of crypto activity as illegal and concerns around stablecoins added to the bearish sentiment. Analysts predict a choppy trading environment in December, with potential washouts and rotations. Despite the negative outlook, investors are still bullish, giving a 12% chance of a crypto winter.

Read more at Yahoo Finance: Bitcoin, Ethereum, and XRP Crash Triggering $637M in Liquidations