Bitcoin Slides as December Begins

What to Know:

• Bitcoin and other major cryptocurrencies experienced a dip, influenced by events in the DeFi space and broader market dynamics.
• A security incident involving Yearn Finance’s yETH liquidity pool triggered market concerns, highlighting ongoing vulnerabilities in crypto infrastructure.
• Despite a late-month recovery, Bitcoin and Ether faced significant losses in November, coupled with notable outflows from U.S.-listed spot Bitcoin ETFs.

The cryptocurrency market experienced a downturn, with Bitcoin, Ether, and other major tokens slipping, influenced by events surrounding DeFi platform Yearn Finance. The price of Bitcoin fell over 3% to nearly $87,000 during early Asian trading hours. This decline reflects ongoing volatility and the impact of security incidents on investor sentiment.

Yearn Finance’s alert about an “incident” in its yETH liquidity pool heightened market anxieties. Social media reports indicated that an attacker exploited a vulnerability to mint a large amount of yETH, draining liquidity and making off with approximately 1,000 ETH (around $3 million). Such incidents highlight the need for robust security measures as institutional participation grows.

The early Asian session sell-off led to liquidations exceeding $400 million in leveraged crypto futures, primarily affecting long positions. This suggests that many traders were anticipating a price rebound and were caught off guard by the sudden downturn. These liquidations contributed to the overall negative sentiment in the market.

Bitcoin ended November with a 17.5% loss, its largest since March, while Ether fell 22%, marking its worst performance since February. Furthermore, U.S.-listed spot Bitcoin ETFs experienced $3.48 billion in net outflows in November, the second-largest redemption on record. Monitoring these trends is important for understanding market sentiment and potential future price movements.

Related: Cardano Bull Setup Points to December Rally

Source: Original article