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This sharp drop in Bitcoin has further intensified the downturn across the cryptocurrency market. Crypto exchanges Coinbase and Robinhood each lost more than 4 percent in value.

Bitcoin fell 6 percent to around $85,894.03, while Ether slid 8.4 percent to $2,776.39. Solana dropped more than 9 percent and was last seen trading below $125, with other closely watched tokens also suffering steep losses.

In Asia, a statement from the People’s Bank of China on Saturday warning against illegal activities involving digital currencies put pressure on shares of digital-asset-related companies listed in Hong Kong, pushing them lower in Monday’s session.

The latest selloff in digital assets coincides with a broader shift toward risk aversion at the start of the month.

Analysts say investors remain “on edge” after the recent Bitcoin selloff, and that Monday’s reversal was largely driven by some $400 million in exchange liquidations. They note that the decline followed sharp October selloffs that had already hit the market, and that Bitcoin is now showing a stronger correlation with certain indices, including the Nasdaq.

What worries analysts is that the move is being driven largely by the retail segment, which behaves very differently from institutional investors. As leverage is used more heavily in this corner of the market, they say, this dynamic will need to be factored in going forward.

Macroeconomic concerns — including uncertainty over a potential U.S. interest-rate cut — continue to weigh on investors’ minds, while doubts about stretched valuations in AI-related stocks, together with rising crypto volatility, have contributed to choppy markets in November.

In crypto markets, several data points suggest digital assets may face a period of short-term weakness ahead. According to crypto market researchers, open interest in perpetual futures has fallen, signaling a pullback in speculative positioning and leverage.

The researchers also point out that trading volumes on centralized and decentralized exchanges remain relatively subdued, which may indicate “weak trading activity and low risk appetite.”