Why did the crypto market experience a significant correction at the end of the year? Bitcoin drops below $88,000 triggering a chain reaction

On the 24th, the cryptocurrency market experienced a significant correction. Bitcoin fell to around $87,260, and Ethereum also dipped to approximately $2,920, with selling pressure emerging across the entire market. What does this actually reflect?

Market Data Perspective: Widespread Declines

The scope of this adjustment is quite broad. Ethereum declined by 1.21% within 24 hours, while smaller-cap coins like Midnight (NIGHT) performed even weaker, with a daily drop of 28%. The NFT sector was also not spared, with an overall decline of over 9%. More tellingly, the total market capitalization of cryptocurrencies shrank sharply from about $3.5 trillion to $2.91 trillion, evaporating over $580 billion in a single day.

This indicates that it’s not just Bitcoin adjusting, but a systemic risk release — from mainstream coins to small tokens, from spot to derivatives, market participants seem to be simultaneously hitting the brakes.

End-of-Year Adjustment or Long-Term Top Signal?

Interestingly, despite the obvious short-term pressure, optimistic voices in the market have not faded. Well-known institutions like VanEck are still promoting the 2026 market outlook, suggesting they have not lost confidence in the subsequent cycle. This also hints that some institutional investors may view this decline as an entry opportunity.

Looking at trading data, this year’s cryptocurrency trading volume reached $8.6 trillion, an 18% year-over-year increase — this growth rate indicates that market participation is steadily improving despite the price weakness.

From another perspective, this could be a year-end profit-taking wave, or it could be the market preparing for a new rebound. But regardless, Bitcoin breaking below the psychological level of $88,000 has indeed disrupted the recent strong trend.