December Bitcoin Bleeds, Bitcoin fell 6% to trade below $86,000 Fears of liquidation by major corporate holders
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| Photo by Kanchanara on Unsplash |
The cryptocurrency market has stumbled into the final month of the year on shaky legs. Bitcoin plunged below the $86,000 mark during early Asian trading on Monday. This sharp 6% decline signals that the bearish sentiment from November is far from over. The selloff was not isolated to the market leader. Ether dropped more than 7% to hover around $2,800 and high flyer Solana took a 7.8% hit.
This latest dip is part of a painful correction that has been dragging on for weeks. The trouble started back in early October when a massive $19 billion in leveraged bets got wiped out. That flush happened just days after Bitcoin celebrated a new all time high of $126,251. The optimism from that peak has evaporated quickly. November saw the original cryptocurrency shed nearly 17% of its value and traders are now bracing for potentially lower lows.
Market analysts are pointing to a distinct lack of buying pressure. Sean McNulty from FalconX highlighted that inflows into Bitcoin exchange traded funds have been meager. The absence of "dip buyers" suggests that investors are waiting on the sidelines rather than rushing in to catch a falling knife. The next critical battleground for bulls and bears appears to be the $80,000 support level. If that floor breaks things could get much uglier.
A major source of anxiety stems from comments made by the leadership of MicroStrategy (referred to as Strategy Inc. in reports). CEO Phong Le admitted in a recent podcast that the company could sell some of its massive $56 billion Bitcoin hoard if necessary. This would happen if their "mNAV" ratio turns negative. This ratio measures the company's enterprise value against its Bitcoin holdings. While Le stated this would be a last resort to fund dividend payments the mere possibility of such a large holder selling has spooked the market.
Adding fuel to the fire is renewed skepticism around stablecoins. S&P Global Ratings recently downgraded its assessment of USDT which is the world’s most widely used stablecoin. The agency warned that a significant drop in Bitcoin prices could leave the token undercollateralized. This matters because USDT acts as the plumbing for the entire crypto trading ecosystem. If traders lose faith in the stability of the dollar peg it causes widespread panic selling across all digital assets.
Regulatory pressure from the East is also weighing on sentiment. The People’s Bank of China issued a fresh warning on Saturday regarding the risks of virtual currencies. They called for deeper coordination among government agencies to crack down on illegal crypto activities. This reminds investors that one of the world's largest economies remains hostile to the sector. Jeff Ko of CoinEx noted that this combination of bearish news over the weekend was the primary catalyst for Monday's drop.
The broader macroeconomic picture isn't offering much relief either. Investors are anxiously awaiting US economic data this week to gauge the Federal Reserve's next move. Policy decisions heading into 2026 hang in the balance. US President Donald Trump recently signaled his pick for the next Fed chair and expects aggressive rate cuts. Meanwhile across the Pacific the Bank of Japan is hinting at a rate hike. This divergence in global monetary policy creates a chaotic environment for risk assets like crypto.