The cryptocurrency market is facing renewed selling pressure amid a combination of macroeconomic headwinds and negative industry developments.
On Monday, the crypto market suffered significant losses. Bitcoin fell by 6%, dropping below the $86,000 level, while Ethereum declined over 7% to around $2,800. The sell-off extended across the market, with other tokens like Solana also recording a 7.8% drop, signaling a risk-off start to December trading.
This downturn reversed last week’s brief recovery. Bitcoin had previously fallen 16.7% in November before stabilizing above $90,000. However, market sentiment remains fragile. After hitting an all-time high of $126,251 in early October, a wave of leveraged bets worth approximately $19 billion was liquidated, triggering weeks of sustained selling.
Following Monday’s latest sell-off, traders are bracing for further declines. Sean McNulty, Head of Asia-Pacific Derivatives Trading at FalconX, noted, "The lack of investor interest in Bitcoin ETFs and the absence of dip buyers are major concerns. We expect structural headwinds to persist this month." He identified $80,000 as the next critical support level for Bitcoin.
**Macro Headwinds Intensify as Global Liquidity Faces Turning Point** The primary concern stems from macroeconomic uncertainty, particularly expectations of tightening global liquidity. Bank of Japan Governor Kazuo Ueda issued the clearest signal yet of a potential rate hike this month, pushing Japan’s two-year bond yield above 1% for the first time since 2008.
Analysts suggest this signals the end of ultra-cheap monetary policies, leading to a repricing of global risk assets—with high-beta, liquid assets like Bitcoin being the most vulnerable.
Meanwhile, markets are closely watching U.S. economic developments. Key data releases this week may provide clues on the Federal Reserve’s rate path through 2026. Former U.S. President Donald Trump stated he has selected his preferred Fed chair nominee, emphasizing expectations for rate cuts. These factors have heightened uncertainty over global interest rate trajectories.
**Industry-Specific Woes Further Erode Confidence** Beyond macroeconomic pressures, a series of negative developments within the crypto sector have further weakened investor sentiment.
Investors are digesting comments from Phong Le, CEO of corporate software firm and Bitcoin whale Strategy Inc., who suggested in a podcast that the company might sell Bitcoin to fund dividends if its mNAV ratio (enterprise value to Bitcoin holdings) turns negative—though he stressed this would be a last resort. The firm, which holds $56 billion in Bitcoin, has seen its mNAV ratio drop to 1.19.
Additionally, the world’s largest stablecoin, USDT, faces renewed scrutiny after S&P Global Ratings downgraded its stability assessment to the lowest level, warning that falling Bitcoin prices could leave the token undercollateralized.
Jeff Ko, Chief Analyst at CoinEx, attributed the latest pressure to "a series of bearish developments over the weekend."
**Leverage Unwinding Amplifies Decline, Highlighting Bitcoin’s Macro Sensitivity** The severity of the sell-off is also tied to market leverage structures. Analysts note that macro-driven declines breached short-term technical support levels, triggering stop-loss orders and liquidating crowded perpetual contract long positions. Forced liquidations in low-liquidity overnight sessions exacerbated the downturn, creating a cascading effect where each liquidation eroded buying power, trapping overleveraged traders.
Notably, Bitcoin’s behavior increasingly resembles that of a macro asset sensitive to interest rate expectations and global liquidity, rather than an independent "digital gold" immune to external shocks. As long as the market narrative centers on rising yields and safer asset appeal, Bitcoin is likely to remain under pressure and trade as a high-risk asset.
