That big drop on December 6 caught a lot of people off guard.

First came a policy punch: the seven major domestic associations issued another risk warning, and over in the EU, the MiCA regulation directly restricted stablecoin liquidity. With regulatory pressure from both sides, market sentiment instantly turned cold.

On the capital side, things got even worse—BlackRock’s Bitcoin ETF has seen net outflows for five consecutive weeks, and traditional funds aren’t interested at all. Expectations for a Fed rate cut are all over the place, so hot money is rushing into gold and Treasury bonds, leaving the crypto market behind.

The technicals were the most lethal: after Bitcoin broke through key support levels, a cascade of liquidations hit like dominoes. Leveraged positions were completely wiped out by the liquidation mechanism, accelerating the plunge.

With this triple whammy of bad news, this drop definitely had solid reasons behind it.