Cryptocurrencies started December with heavy losses, reigniting a wider selloff that had briefly paused last week. Bitcoin plunged as much as 7%, falling below $85,000 in early New York trading before recovering slightly. Ether slid around 7%, dropping under $2,800, while most major tokens—including Solana, which fell nearly 8%—moved sharply lower.
The downturn comes after weeks of volatility triggered by the liquidation of approximately $19 billion in leveraged crypto positions in early October, just days after Bitcoin touched a record high of $126,251. Bitcoin lost 17% in November, but a brief slowdown in selling pressure pushed the asset back above $90,000 last week—until Monday’s renewed plunge.
Weak ETF demand intensifies the downside
Market participants point to one dominant concern: fading demand for Bitcoin ETFs.
“It’s a risk-off start to December,” said Sean McNulty, APAC derivatives trading lead at FalconX. “The biggest concern is the meagre inflows into Bitcoin exchange traded funds and the absence of dip buyers. We expect structural headwinds to continue this month. The next key support level to watch is $80,000.”
U.S. spot Bitcoin ETFs recorded a modest $70 million in inflows last week, following more than $4.6 billion in outflows over the previous month. Most of the selling pressure has come from the iShares Bitcoin Trust, which has now logged five straight weeks of withdrawals, the longest streak since it launched in January 2024.
Macro headwinds weigh on crypto sentiment
Broader global market dynamics also pressured digital assets. U.S. equities started the week in negative territory, and Japan’s markets saw sharp moves after Bank of Japan Governor Kazuo Ueda signaled the strongest hint yet of an upcoming rate hike.
“Rising Japanese government bond yields added further downside pressure,” said Jeff Ko, chief analyst at CoinEx. “Investors are assessing the possibility of a rapid unwind of the yen carry trade, a pattern that typically drags down global risk assets, including crypto.”
Corporate developments add uncertainty
Adding to market unease, Michael Saylor’s Strategy Inc. announced the creation of a $1.4 billion reserve to cover future dividend and interest payments. While the move eased immediate concerns about forced Bitcoin sales, investors remain cautious.
CEO Phong Le said in a recent podcast that the company could sell bitcoin if its mNAV (a ratio comparing enterprise value to Bitcoin holdings) fell below 1.0. “We would sell Bitcoin if needed to fund dividend payments below 1x mNAV,” he noted, though he stressed it would be a last resort. Strategy currently holds about $56 billion in Bitcoin.
Regulatory pressure resurfaces
Sentiment weakened further after S&P Global Ratings downgraded its stability assessment of USDT, the world’s largest stablecoin, citing concerns that a significant drop in Bitcoin could leave it undercollateralized.
Meanwhile, China’s central bank issued a new warning on virtual currencies, urging tighter inter-agency coordination to crack down on illegal crypto-related activities.
“These bearish developments over the weekend—especially the USDT downgrade and the PBOC warning—have added fresh pressure on cryptocurrencies,” CoinEx’s Ko said.
What’s next for Bitcoin?
With macro uncertainty growing and ETF demand weakening, analysts say volatility could intensify. Traders now watch $80,000 as the next major support level for Bitcoin. The week ahead also features key U.S. economic data that may shape expectations for Federal Reserve rate cuts in 2026—potentially influencing crypto sentiment.
About The Author
