Crypto Market Recap Weekly Liquidity Review December 2025

The first week of December 2025 opened with a violent flush across the crypto market and ended with a cautious rebound. Bitcoin traded around the low to mid 90,000 US dollar region after spiking below recent support, while Ethereum reclaimed ground above 3,100 US dollars. Altcoins remained under pressure, with many majors posting weekly losses even as the large caps stabilised. Underneath the headlines, this week was all about liquidity – forced liquidations, ETF flow divergence and targeted hunts around obvious levels.

Almost one billion dollars in leveraged crypto positions were wiped out at the start of the week as price slid sharply, triggering margin calls and cascading stops. That flush reset positioning, shook out late longs and gave smart money fresh room to rebuild exposure at better prices. At the same time, Bitcoin spot ETF flows wobbled while Ethereum products attracted sizeable inflows, creating an interesting split in institutional liquidity.

This weekly recap focuses on where liquidity was taken, how smart money likely responded, and what that means for Bitcoin, Ethereum and altcoins going into the next trading week. For structured liquidity based training on XAUUSD, BTC, ETH and more, visit Liquidity By Murshid.

Early Week Shock Massive Liquidations And Liquidity Flush

The week started with a brutal risk off wave. Crypto market capitalisation dropped sharply as Bitcoin slid from the high 80,000s into the mid 80,000s region intraday, while Ethereum traded down toward the high 2,700s to low 2,800s. Thin weekend liquidity and renewed macro nerves amplified the move, triggering almost one billion US dollars worth of leveraged liquidations across exchanges in a single day.

From a liquidity perspective, this was a classic long side wipeout. Stops from overcrowded longs below recent swing lows were hit in rapid succession. Perpetual futures funding flipped and open interest was cut down as forced exits de-leveraged the market. Retail traders who chased the late November bounce with high leverage were removed from the book; their exits provided the liquidity needed for stronger hands to step in lower.

Bitcoin Liquidity Story Bouncing Off Fear Yet Still Range Bound

After the initial flush, Bitcoin stabilised and began grinding back toward the low to mid 90,000 area. Despite scary headlines and extreme fear readings, the weekly percentage change in price ended up relatively modest. The key action was not the final close, but where liquidity was hunted during the journey.

On the downside, liquidity below recent lows in the mid 80,000s was cleared early in the week, forcing out late longs and triggering liquidations. On the upside, each push into the low 90,000s tested resting sell orders and short term resistance, but did not yet challenge the more significant resistance band that sits higher up toward prior all time high zones from October and early November.

ETF flows reflected this indecision. Spot Bitcoin products saw mixed to slightly negative flows, suggesting some institutions used the bounce to de-risk while others quietly accumulated. Price action and flows together paint a picture of a market that has flushed leverage but not yet chosen a clear new trend.

Ethereum Liquidity Story Stronger Inflows And A Cleaner Reclaim

Ethereum faced the same early week shock but showed a stronger recovery profile. After dipping toward the high 2,700s to low 2,800s, ETH rebounded above the 3,000 handle and spent the rest of the week holding above 3,100 US dollars, posting a healthier percentage gain than Bitcoin over the same period.

The liquidity picture on ETH was shaped by one big factor ETF flows. While some Bitcoin funds saw net outflows, Ethereum funds recorded solid net inflows, signalling that institutional capital remains interested in building ETH exposure on dips. That flow supported price during the rebound and helped ETH reclaim key structure faster than many altcoins.

From a smart money viewpoint, the early week sweep below recent ETH lows provided an opportunity to accumulate into fear, especially as funding and sentiment flipped excessively bearish. The subsequent grind higher into the 3,100 to 3,200 zone shows that those bids were respected and defended.

Altcoins Under Pressure Where Liquidity Was Taken

While BTC and ETH managed a stabilisation and partial rebound, many major altcoins spent the week under pressure. Tokens like Solana, XRP, Dogecoin and other high beta names saw deeper weekly drawdowns, with several logging losses in the five to ten percent range. In contrast, a handful of large caps such as BNB, TRX and ADA managed small gains or held flat.

Altcoin liquidity hunts were especially brutal around obvious technical levels. Clean equal lows, prior breakout zones and psychological levels were taken out as market makers and larger players used thin books to test downside. The goal was simple shake out weak long exposure, trigger stop cascades and reset funding across riskier names.

For traders, this week reinforced a familiar lesson in crypto bear phases inside broader uptrends altcoins behave like leveraged plays on Bitcoin and Ethereum. When the majors experience a leverage flush, altcoin liquidity is hit even harder, and recovery is often slower and more selective.

Derivatives And Liquidations The Hidden Liquidity Engine

The sharp moves at the start of the week were driven as much by derivatives as by spot markets. High open interest in perpetual futures and options set the stage for a cascade once key levels broke. As prices slid, forced liquidations and stop orders created a feedback loop, driving price deeper into liquidity pockets than many spot traders expected.

Total crypto liquidations over the week climbed into the billion dollar region, especially concentrated on overleveraged long positions that were entered late during November’s rally. Once those positions were flushed, funding rates normalised and open interest dropped, creating a cleaner foundation for the later rebound.

This is the core of the weekly liquidity story the market needed to clear excess leverage after a strong prior run. The early December flush delivered that reset in one aggressive burst instead of a slow bleed.

What Smart Money Likely Did During This Week

Smart money did not panic during the initial dump. They have seen this movie many times. Instead, they likely used the early week crash to buy into forced selling and to take the other side of liquidation flows, especially in Bitcoin and Ethereum where structural demand and ETF support remain strong.

Their probable playbook looked something like this:

• Let overcrowded long positions get liquidated below obvious liquidity pools on BTC and ETH.
• Accumulate spot and low leverage futures positions into fear while funding turned negative.
• Selectively rotate into stronger narratives and higher quality altcoins while avoiding illiquid names.
• Keep dry powder for any further macro driven shocks later in December.

The calm way price stabilised after the flush and the divergence between BTC outflows and ETH inflows support this interpretation. Big money was not exiting crypto entirely; it was reshaping exposure.

How To Use This Weekly Liquidity Review For Your Trading

A weekly liquidity recap is only useful if you convert it into rules. This week’s action offers several practical lessons for anyone trading Bitcoin, Ethereum or altcoins in December 2025.

• Respect leverage and open interest. When positioning is crowded and funding is stretched, you must be ready for violent flushes like the one we just saw.
• Mark obvious liquidity pools on your chart weekly prior highs, lows and psychological handles so you are not surprised when price spikes into them.
• Separate majors from altcoins. BTC and ETH can stabilise while altcoins still bleed; size and risk them differently.
• Watch ETF flows and sentiment indicators. Divergence between Bitcoin and Ethereum flows this week tells you where institutional liquidity is leaning.

Instead of reacting emotionally to every candle, use the weekly liquidity story as a map. Ask Where was liquidity taken this week and Where is it likely to be taken next if volatility returns.

Conclusion Reading The Crypto Week Through Liquidity Not Noise

The first week of December 2025 will be remembered as a fast leverage reset rather than a full scale trend reversal. Bitcoin and Ethereum survived a brutal flush, altcoins took the heavier damage, and almost one billion dollars in leveraged bets were wiped out as liquidity was harvested below obvious support zones. By the end of the week, majors had stabilised, ETF flows showed a split between BTC and ETH, and the market looked cleaner but still cautious.

If you are serious about trading crypto in this environment, you cannot rely on headlines alone. You need to track liquidity, leverage, ETF flows and key levels on a weekly basis, then align your intraday decisions with that bigger story. When you do, weeks like this stop feeling like chaos and start looking like exactly what they are intentional liquidity events inside a much larger trend.

To learn how to build a full liquidity map each week for Bitcoin, Ethereum, gold and other markets and turn it into a high probability trading plan, explore the education and strategy breakdowns at Liquidity By Murshid.