Bitcoin Plunges Below $86K as December Opens with High Selling Pressure
Bitcoin, the flagship cryptocurrency, experienced a volatile start to December, dropping as much as 6% on Monday to breach the crucial $86,000 support level during early Asian trading. The high selling pressure was mirrored across the broader market, with major tokens like Solana, Ethereum, and XRP suffering approximately 8% declines.
This latest slide confirms the continued fragility of the cryptocurrency market, which has struggled since an estimated $19 billion in leveraged bets were liquidated in early October, days after Bitcoin hit its all-time high of $126,251.
Table of Contents
Market Crash and Liquidation Data
Structural Concerns: ETF Flows and Institutional Sentiment
Corporate Bitcoin Holders and Strategic Warnings
Derivatives Market Signals Caution
Macroeconomic and Regulatory Headwinds
1. Market Crash and Liquidation Data
The Monday slide extended a tough period for Bitcoin, which lost 16.7% of its value in November despite a brief recovery last week that pushed it past the $90,000 mark. The sharp movement triggered mass liquidations in the derivatives market.
The key concern among analysts is the lack of “dip buyers” stepping in to stabilize prices, suggesting that the structural challenges driving the selloff are likely to persist throughout December. The next critical technical support level for Bitcoin is identified at $80,000.
2. Structural Concerns: ETF Flows and Institutional Sentiment
One of the primary reasons cited for Bitcoin’s stagnant pricing is the disappointing lack of new capital flowing into Spot Bitcoin Exchange-Traded Funds (ETFs).
Net Inflows (Week ending November 28): Bitcoin ETFs recorded only $70 million in net asset growth, a modest figure compared to the massive inflows seen during the early stages of institutional adoption.
Minor Uptick: While Bitcoin ETF inflows reached $220 million during Thanksgiving week and Ether ETFs saw $312 million, these were considered minor deviations from the generally sluggish trend.
Adding to the instability, S&P Global Ratings downgraded the world’s largest stablecoin, USDT, to its lowest rating last week. The warning suggests that a continued decline in Bitcoin’s price could leave the token undercollateralized until further notice, amplifying systemic risk fears.
3. Corporate Bitcoin Holders and Strategic Warnings
Investor sentiment was further dampened by comments and actions from major corporate Bitcoin holders.
Strategy’s mNAV: Strategy, which holds $56 billion in Bitcoin, saw its mNAV (a ratio of enterprise value to Bitcoin holdings) drop to 1.19. CEO Phong Le stated that the company would consider selling Bitcoin if the mNAV ratio dropped below 1x to fund dividend payments, a key remark that contributed to market nervousness on Monday.
SpaceX Transfer: Speculation about a possible corporate sale was sparked when 1,163 BTC linked to SpaceX was transferred to new addresses on Thursday, although no official statement confirmed whether this was a sale or a change in custody.
None of the major companies holding Bitcoin as treasury reserves have increased their purchases in the past two weeks, indicating a cautious stance among institutional buyers.
Bitcoin Plunges Below $86K as December Opens with High Selling Pressure
4. Derivatives Market Signals Caution
Data from the Bitcoin derivatives market reflects pervasive caution and a lack of conviction among leveraged traders.
Futures Basis Rate: Monthly futures contracts are currently priced only 4% higher than in the spot market. This low “basis rate” is significantly below the typical 5–10% range observed during neutral conditions, indicating a distinct lack of interest in leveraged long (buy) bets, likely due to Bitcoin’s 18% decline over the past 30 days.
Options Market: The options market shows a bias toward bearish sentiment, with significantly more put (sell) options than call (buy) options traded toward the end of last week. The put-to-call premium volume ratio remains higher than the 1.3x level that would signal neutral conditions, favoring downside protection.
Technical Picture: The negative outlook is compounded by the technical picture, as Bitcoin recently declined below the lower band of a developing bear flag pattern.
Regulatory and macroeconomic factors are adding uncertainty to the market:
China Warning: The People’s Bank of China (PBOC) added to the regulatory uncertainty on Saturday by issuing a warning about the dangers of virtual currencies and stablecoins, calling for closer collaboration among government agencies to combat illicit activity.
US Economic Data: The upcoming week is expected to deliver crucial U.S. economic momentum data, which will heavily influence expectations regarding the Federal Reserve’s interest rate policy.
Fed Chair Nomination: U.S. President Donald Trump’s Sunday announcement of his nominee for the next Fed chair, who is anticipated to favor interest rate cuts, introduces a new dynamic that traders will be digesting in the context of inflation and economic health.
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