Bitcoin opened the final month of the year on a sharply negative footing, dropping as much as 6% during Monday’s Asian session and breaking decisively below the psychologically important $86,000 level for the first time in weeks.
The sell-off dragged the broader cryptocurrency market lower, with major altcoins suffering steeper losses. Ethereum, Solana, and XRP each shed around 8% in the same period, reflecting widespread risk aversion among traders.
The latest leg down extends a painful stretch for the market that began in early October, when Bitcoin was trading above $126,000. A violent deleveraging event at that time wiped out nearly $19 billion in futures positions and has left sentiment fragile ever since. November alone saw Bitcoin decline 16.7%, marking one of its worst monthly performances of the year despite a brief recovery above $90,000 last week.
Over the past 24 hours, more than 216,000 traders were liquidated across crypto exchanges, with total liquidations reaching $639 million, according to Coinglass data.
Analysts pointed to several structural headwinds weighing on price action. Fresh capital flowing into U.S. spot Bitcoin ETFs has slowed dramatically; the week ending November 28 recorded only $70 million in net inflows—a fraction of the multibillion-dollar weekly figures seen earlier in 2024. Ether ETFs fared slightly better with roughly $312 million during the U.S. Thanksgiving holiday week, but the overall trend remains anemic.
Corporate treasury activity has also dried up. None of the publicly traded companies holding significant Bitcoin reserves have announced new purchases in recent weeks. Attention has instead turned to potential sales. On Friday, the CEO of a major corporate holder (which currently manages approximately $56 billion in Bitcoin) reiterated in a podcast interview that the firm would be willing to sell BTC if its internal valuation metric—enterprise value relative to Bitcoin holdings—fell into negative territory. The company’s ratio has already slipped to 1.19 from higher levels earlier in the year.
Adding to the cautious mood, S&P Global Ratings downgraded Tether (USDT), the world’s largest stablecoin, to its lowest tier last week, citing the risk that a sustained Bitcoin price decline could impair the token’s collateral backing.
Derivatives markets are flashing similar warning signs. The annualized basis on monthly Bitcoin futures contracts has collapsed to just 4%, well below the 5–10% range typically associated with neutral or bullish conditions. Options traders have also tilted heavily toward downside protection, with put volume consistently outpacing call volume in recent sessions.
Technically, Bitcoin’s breach of the lower boundary of a multi-week bear flag pattern has opened the door to a potential retest of the $80,000 zone, a level multiple analysts now identify as the next major support.
Macro uncertainty is not helping. On Saturday, the People’s Bank of China issued a fresh warning about risks posed by virtual currencies and stablecoins, vowing tighter inter-agency coordination against illicit activity. Meanwhile, market participants are bracing for a busy U.S. economic calendar this week that could influence expectations for Federal Reserve rate cuts in 2025.
With dip buyers remaining on the sidelines and leveraged positions still elevated after October’s wipeout, the path of least resistance for Bitcoin appears to be lower in the near term as the market enters what has historically been a volatile December.
