Crypto crash today: what’s driving Bitcoin and altcoins sharply lower?
Bitcoin and the wider digital asset market resumed their slide on December 13, with red screens dominating across major tokens. Total crypto market capitalization shed more than 2% over the past 24 hours as traders cut risk exposure and momentum from the recent rally faded.
Bitcoin (BTC) retreated from this week’s high near $94,000 to around $90,000, erasing a meaningful chunk of its latest gains. Among the worst performers were The Graph, Story, Algorand, and Ethena, each dropping more than 5% over the same period, underscoring how altcoins typically amplify Bitcoin’s moves during risk-off phases.
Macro headwinds: crypto falls with stocks
The latest leg of the crypto downturn has not happened in isolation. It is unfolding alongside a broader pullback in global risk assets, particularly US equities. Investors who had aggressively chased technology and growth names in recent months are now reassessing that optimism amid concerns that the AI trade may be stretched and that earnings growth could struggle to justify lofty valuations.
Recent quarterly results from large tech and semiconductor players, including Broadcom and Oracle, reflected that tension. Their mixed outlooks cooled some of the enthusiasm around AI-related spending and triggered profit-taking in the sector.
The tech-heavy Nasdaq 100 Index tumbled about 500 points, while the S&P 500 and Dow Jones Industrial Average fell roughly 70 and 210 points, respectively. Those declines signaled a broad risk-off tone rather than a crypto-specific shock.
At the same time, the so‑called “fear gauge” in equities, the VIX Index, climbed more than 2.7% to around 16.70. Rising volatility expectations, combined with higher bond yields, typically push investors toward safer, income‑generating assets and away from highly speculative plays like cryptocurrencies.
Yields on US government bonds moved higher despite the Federal Reserve’s recent 0.25 percentage point interest rate cut. The 10‑year Treasury yield rose to about 4.20%, while the 2‑year yield climbed to roughly 3.53%. This combination – monetary easing but rising market yields – suggests that bond traders expect inflation pressures or fiscal concerns to persist, keeping real yields elevated and tightening financial conditions for risk assets.
Against that backdrop, crypto is feeling the impact of a classic de‑risking episode. When stocks stumble, volatility rises, and yields tick up, capital tends to migrate away from the most volatile corners of the market, and digital assets are usually high on that list.
Technical stress: bearish patterns on the Bitcoin chart
Beyond macro pressure, Bitcoin’s own price structure is flashing warning signs for technically oriented traders.
On medium‑term timeframes, Bitcoin has recently printed a “death cross” pattern, a widely watched bearish signal in technical analysis. This formation occurs when the 50‑day moving average crosses below the 200‑day moving average, indicating that short‑term price momentum has deteriorated relative to the longer trend. The death cross appeared on Bitcoin’s chart in November and has since weighed on market sentiment.
Currently, BTC is also trading below its key moving averages and under a bearish Supertrend indicator. When price stays beneath these dynamic resistance levels, systematic strategies that rely on trend‑following rules are more likely to stay short or on the sidelines, reducing buy‑side liquidity.
Adding to the caution, Bitcoin has carved out what many chart analysts describe as a bearish flag pattern. This typically consists of a steep initial drop followed by a short‑term consolidation that slopes upward or moves sideways before potentially resolving lower. If this pattern plays out in full, traders see scope for Bitcoin to extend its decline toward the $75,000 region. A move of that magnitude in the market’s bellwether would probably trigger additional stress across altcoins and leveraged positions.
Derivatives show investors are dialing down risk
The weakness in spot prices is mirrored in the derivatives market, where futures data points to waning speculative appetite.
Total futures open interest across major exchanges has fallen by more than 1.34% in the last four hours alone, dropping to around $133 billion. Open interest reflects the value of all outstanding futures contracts; when it falls, it often indicates that traders are closing positions rather than opening new ones. In trending markets, rising prices accompanied by growing open interest signal fresh capital pouring in. The current combination – falling prices and shrinking open interest – indicates that leveraged longs are being unwound and that new money is hesitant to step in aggressively.
This decline in open interest is not a one‑off move. It continues a downtrend that began after open interest hit a peak above $255 billion in October, a period that coincided with the liquidation of more than 1.6 million positions. Those earlier liquidations likely scarred many short‑term traders, making them more cautious about deploying leverage again at elevated price levels.
Historically, crypto markets often weaken when open interest is dropping, particularly if it signals that speculative fuel is being removed from the system faster than long‑term investors are willing to replace it.
Shrinking trading volumes underscore fading enthusiasm
Open interest is falling alongside trading activity. Over the recent session, reported volume in the crypto market slid about 15% to roughly $200 billion. Lower volume typically reflects reduced conviction and participation, with fewer market participants willing to trade aggressively in either direction.
In a rising market, strong price advances on expanding volume are seen as healthy and sustainable. Conversely, when prices move sharply on thinning volume, the trend can be fragile and more vulnerable to rapid reversals. The combination of price weakness, shrinking open interest, and declining volume now points to a soft, liquidity‑thin environment where abrupt moves can be exacerbated.
That said, it is also true that weekends and holiday-adjacent periods in crypto frequently see subdued trading activity and reduced open interest. Many professional desks limit exposure during thin conditions to avoid getting caught in erratic price swings. The current pullback, therefore, likely reflects both structural weekend effects and more fundamental risk‑off behavior.
Altcoins underperform as usual
As is typical during crypto downturns, altcoins are underperforming Bitcoin. Tokens like The Graph, Story, Algorand, and Ethena, which had benefited from speculative flows during bullish stretches, are now seeing outsized drawdowns of more than 5%.
This divergence is common: when sentiment deteriorates, capital tends to rotate first into the relative safety of Bitcoin and stablecoins, and away from smaller, less liquid projects. As liquidity thins, even modest selling pressure can trigger large percentage moves in these tokens.
For traders, this dynamic means that portfolio volatility can spike dramatically if they are heavily weighted toward smaller-cap assets. For longer‑term investors, it serves as a reminder that diversification in crypto is not the same as diversification in traditional finance; many altcoins correlate strongly with BTC on the downside yet carry higher individual risk.
Why macro and technical forces are colliding now
The timing of this correction reflects the intersection of several forces:
– Positioning was stretched: After a strong multi‑month rally, many indicators showed that speculative positioning in both spot and futures had become crowded, leaving the market vulnerable to a pullback.
– Macro sentiment flipped: Concerns around AI valuations, uneven earnings, and rising bond yields sparked a broader sell‑off in tech, dragging down other risk assets.
– Technical signals turned bearish: The death cross, bearish flag, and failure to reclaim key moving averages gave short sellers and cautious traders a clear technical framework to position against.
– Liquidity is thinner: With volumes and open interest declining, even regular selling has an outsized impact on price, deepening the red across the board.
When these elements align, the resulting corrections can feel abrupt and indiscriminate, even if the long‑term narratives around digital assets remain intact.
What this means for traders and investors
For short‑term traders, the current setup is challenging. Volatility is high, liquidity is patchy, and technical signals skew bearish. Many will prefer to wait for clearer confirmation of a bottom – such as a reclaim of key moving averages, a reversal in open interest, or a shift in macro sentiment – before re‑entering with size.
Longer‑term investors, by contrast, often look at such corrections as part of the normal crypto market cycle. Historically, large drawdowns within broader uptrends have occurred multiple times, shaking out leveraged players while allowing more patient participants to add exposure at lower prices.
Key factors to monitor in the coming days include:
– Whether Bitcoin can hold major support zones above prior breakout levels.
– If open interest begins to stabilize or rise without a surge in forced liquidations.
– The behavior of US yields and equity indices, as any stabilization there could relieve pressure on risk assets broadly.
– The relative strength of Bitcoin versus altcoins; a return to BTC leadership often precedes a more durable recovery in the sector.
Is this the start of a deeper bear market?
At this stage, the pullback looks more like a sharp correction within an already extended cycle than the beginning of a new multi‑year bear phase. That assessment could change if macro conditions worsen materially – for example, if inflation re‑accelerates, central banks turn more hawkish than expected, or a major credit event hits broader markets.
So far, the narrative remains focused on valuation adjustments, position clearing, and technical resets rather than a structural collapse of confidence in digital assets. There have been no major new regulatory shocks or systemic failures comparable to earlier crises, which suggests that the current downturn is being driven mainly by market mechanics and macro risk sentiment.
Practical takeaways during the crash
For participants trying to navigate this environment:
– Avoid excessive leverage: With volatility elevated and open interest declining, leverage can accelerate losses quickly.
– Focus on liquidity: Larger, more liquid assets like BTC and ETH typically offer tighter spreads and more reliable execution during stressed conditions.
– Watch derivative indicators: Funding rates, open interest, and liquidations can provide early clues about when selling pressure is exhausting.
– Keep time horizon in mind: Short‑term price moves can be violent and emotionally charged, but long‑term theses should be evaluated on fundamentals, adoption trends, and regulatory developments rather than intraday swings.
The bottom line
The current crypto crash reflects a confluence of factors: a broader risk‑off environment in global markets, bearish technical structures on Bitcoin’s chart, unwinding leverage in derivatives, and deteriorating liquidity. Bitcoin’s drop from around $94,000 to $90,000, the weakness in altcoins such as The Graph, Story, Algorand, and Ethena, and the decline in futures open interest and trading volume all point to investors stepping back from risk.
While such episodes are uncomfortable, they are not unusual for an asset class that remains highly speculative and sensitive to macro shifts. Whether this decline deepens toward the $75,000 region or stabilizes sooner will depend on how quickly risk appetite returns, how technical levels evolve, and whether macro headwinds ease in the weeks ahead.