Bitcoin slides below $86,000 as crypto market loses momentum

Whale selloffs, leverage unwinding, and Fed uncertainty fuel a month-long pullback

The cryptocurrency market continues to retreat, closing the Asian trading week with another sharp drop. On Friday, Bitcoin fell as much as 2.1%, slipping below the $86,000 threshold for the first time since April and trading at $85,474 at 10:59 a.m. in Singapore. The decline extends a pullback lasting more than a month, reflecting a market struggling to regain the enthusiasm seen early in the year.

Large-scale selloffs by major holders are weighing heavily on prices. According to James Butterfill, head of research at CoinShares, so-called “whales” have offloaded more than $20 billion since September, following the narrative of Bitcoin’s four-year cycle. Though this theory lacks strong fundamental backing, it has become somewhat self-fulfilling, further weakening demand.

The macro backdrop offers little relief. After tech stocks surged on Nvidia’s strong earnings, concerns over lofty AI-driven valuations and doubts about the Federal Reserve’s ability to cut rates in December have reintroduced volatility on Wall Street. Cryptocurrencies — already dealing with internal deleveraging and softer retail demand — have been hit even harder.

The $85,000 level has now become the key reference point for options traders on Deribit, where demand for downside protection is highest, followed by interest around $82,000. The market has yet to recover from October’s violent liquidations — over $19 billion in leveraged positions wiped out in a single session — which drained liquidity and left order books thin, making prices hypersensitive even to modest flows.

“Uncertainty around how the Federal Reserve will set monetary policy in the current data vacuum is limiting investors’ appetite for risk, and this is most visible in the riskiest assets,” said Jake Ostrovskis of Wintermute. For Bitcoin, the path to recovery still looks uphill.

Andrea Pelucchi