The crypto markets had a rough Monday, with leading digital assets falling in lockstep with equities as investors brace themselves for critical employment data that could shape the Federal Reserve's next moves.

When Bitcoin Sneezes, Everyone Catches a Cold

Bitcoin extended its losing streak Monday, plunging below $86,000 in the early afternoon and dragging the rest of the crypto universe down with it. Ethereum couldn't hold the psychologically important $3,000 mark, while XRP and Dogecoin both shed more than 4%.

The pain wasn't limited to cryptocurrencies themselves. Crypto-adjacent stocks took a beating during regular trading hours, with Strategy Inc. (MSTR) closing down 8.14% and Coinbase Global Inc. (COIN) falling 6.37%.

The carnage was real: over $600 million was liquidated from the cryptocurrency market in the last 24 hours, according to Coinglass. The bulls bore the brunt of it, with $505 million in long positions getting wiped out. That's what happens when leveraged traders bet on a bounce that doesn't materialize.

Bitcoin's open interest dropped 1.88% over the same period and has plummeted more than 35% since the leading cryptocurrency hit its all-time highs back in October. Meanwhile, the Crypto Fear and Greed Index showed "Extreme Fear" continuing to grip the market, which tracks with what you'd expect when prices keep sliding.

Top Gainers (24 Hours)

The global cryptocurrency market capitalization stood at $3.03 trillion after dropping 1.75% in the last 24 hours.

Traditional Markets Also Feeling Jittery

Stocks didn't fare much better Monday. The Dow Jones Industrial Average slipped 41.49 points, or 0.09%, to settle at 48,416.56. The S&P 500 dipped 0.16% to finish at 6,816.51, while the tech-heavy Nasdaq Composite fell 0.59% to 23,057.41.

Everyone's waiting for Tuesday's big reveal: the Bureau of Labor Statistics will release November nonfarm payrolls data along with the October establishment survey data. Wall Street analysts are forecasting roughly 40,000 new nonfarm payrolls for the period, which would represent a dramatic slowdown from September's 119,000 jobs added. That's the kind of number that could significantly influence the Fed's thinking on interest rates.

Recent Bitcoin Buyers Are Underwater

On-chain analytics firm CryptoQuant pointed out something uncomfortable for recent crypto buyers: Bitcoin has been trading below Short-Term Holders' realized price of $104,000 for nearly two months now. That means anyone who bought Bitcoin recently is sitting on losses.

Short-Term Holders, in crypto parlance, are addresses that have held BTC for less than 155 days. Essentially, they're the new money that came in during the rally.

"As long as Bitcoin fails to reclaim the STH realized price near $104,000, market conditions are likely to remain uncomfortable for recent entrants, a structure more consistent with a transitional phase than with a bearish market," CryptoQuant added. Translation: this doesn't look like a full-blown bear market yet, but it's definitely not fun if you bought the top.

Analyst Maps Out What Comes Next

Michaël van de Poppe, a widely followed cryptocurrency analyst and trader, weighed in on Bitcoin's latest breakdown. His outlook isn't exactly cheerful: he's projecting further drops below $83,800 and potentially even $80,500.

Van de Poppe said this makes sense given what's happening this week: employment data, consumer price index numbers, and the possibility of a Bank of Japan rate hike. That's a lot of macro uncertainty hitting all at once.

But there's a silver lining in his analysis. Van de Poppe said a rebound above $88,000 would be a "strong" signal and mark the end of the correction. So if Bitcoin can claw its way back above that level, recent buyers might finally get some relief. Until then, the "Extreme Fear" reading seems entirely appropriate.