Crypto rout on Dec. 1: liquidations surge after negative Tether headlines — recovery possible in December
Crypto markets plunged on Dec. 1 as a wave of negative headlines and forced liquidations hit prices. Total liquidations jumped 440% in 24 hours to about $781 million, including roughly $311 million in BTC and $167 million in ETH positions. The sell-off was driven by concerns around Tether after S&P Global downgraded the stablecoin and flagged potential asset-liability mismatches, plus commentary from industry figures warning of risks if interest-rate assumptions change. Corporate selling risk also rose after a strategist warned a bitcoin-holding firm might liquidate reserves if enterprise multiples turn negative. ETF outflows added pressure: spot BTC funds saw roughly $3.5 billion of outflows in November and ETH funds experienced their first outflow in months. Near-term bullish catalysts cited include rising market bets (Polymarket) that the Fed will cut rates in December (near 90% odds), speculation around a crypto-friendly Fed chair pick, a possible BTC double-bottom technical pattern around $80,494 with a neckline near $93,185, and an extreme Fear & Greed Index reading (<20) that historically precedes rallies. Traders should expect elevated volatility: short-term downside from liquidations and flows, but potential relief rallies if macro expectations shift toward rate cuts or if technical support holds.
Bearish
The report points to clear, near-term bearish drivers: a sharp 440% rise in liquidations ($781M) that mechanically increases selling pressure, negative fundamental headlines about Tether (S&P downgrade and commentary on asset/liability risk), and large ETF outflows (≈$3.5B from spot BTC in November). These factors historically depress prices and raise volatility. In the short term, traders should expect further downside or choppy moves as leveraged positions continue to unwind and funds rotate. However, the article also lists plausible bullish catalysts — elevated odds of a Fed rate cut, possible crypto-friendly Fed leadership, a potential BTC double-bottom technical pattern, and an extreme Fear & Greed reading — which could trigger relief rallies if realized. Historically (e.g., prior post-liquidation rebounds), markets have rebounded quickly once macro sentiment shifts or selling pressure abates, but recovery depends on confirmed macro changes (rate-cut signals or capital inflows) and stabilization of stablecoin confidence. Thus the immediate impact is bearish, while medium-term outcomes remain conditional on macro and technical developments.