Bitcoin fell to $85,000 on December 15, continuing its recent decline amid global macroeconomic risks, reduced leverage, and weak liquidity. This drop wiped out over $100 billion from the total market capitalization of cryptocurrencies in just a few days, raising questions about whether the selling has ended.
While there was no single catalyst that caused this move, five overlapping forces have pushed Bitcoin down and may continue to pressure prices in the near term.
Concerns over the Bank of Japan raising interest rates led to a reduction in global risk.
The largest macro driver came from Japan. Markets moved ahead of the widely expected interest rate hike from the Bank of Japan later this week, which will raise Japanese interest rates to levels not seen in decades.
Even a slight increase is significant as Japan has long fueled global risk markets through yen carry trading.
For years, investors have borrowed cheap yen to buy higher-risk assets like stocks and cryptocurrencies. With Japanese interest rates rising, that trade is unwinding. Investors are selling risk assets to meet yen obligations.
Bitcoin reacted sharply to previous Bank of Japan increases. In the last three instances, Bitcoin's price fell between 20% and 30% in the following weeks. Traders began to price according to that historical pattern before making their decisions, pushing Bitcoin down beforehand.
U.S. economic data reintroduces uncertainty into policies.
Meanwhile, traders reduced risk ahead of a large list of U.S. macro data, including inflation figures and labor market statistics.
The Federal Reserve recently cut interest rates, but officials indicated caution regarding the pace of future easing. This ambiguity is significant for Bitcoin, which is increasingly trading as a macro-sensitive liquidity asset rather than as an independent hedge.
As inflation remains above target and weak job data is anticipated, markets have struggled to price the Fed's next move. This hesitation has reduced speculative demand and encouraged traders to stay away.
As a result, Bitcoin completely lost its momentum as it approached key technical levels.
Heavy leveraged liquidations accelerated from the downturn.
Once Bitcoin fell below 90,000 dollars, forced selling took over.
Over 200 million dollars in horrific long positions were liquidated within hours, according to derivatives data. Long-time traders had piled into bullish bets after the Fed cut interest rates earlier this month.
When prices fell, liquidation engines automatically sold Bitcoin to cover losses. This selling pushed prices down further, leading to more liquidations in a feedback loop.
This mechanical effect explains the speed and rapidity of the move rather than it being gradual.
The timing of the sale made matters worse.
Bitcoin collapsed during weak weekend trading, where liquidity is usually lower and order books are shallow. In these conditions, relatively small sell orders can move prices aggressively.
Large holders and derivatives desks reduced exposure to low liquidity, increasing volatility. This dynamic helped pull Bitcoin from the low range at 90,000 dollars toward 85,000 dollars in a short window.
Weekend collapses often look dramatic even when broader fundamentals remain unchanged.
The pressure on the market structure has been exacerbated by large sales from Wintermute, one of the largest market makers in the cryptocurrency industry.
During the sell-off, on-chain and market data showed that Wintermute sold a large amount of Bitcoin — valued at over 1.5 billion dollars — across centralized exchanges. Reports indicated that the company sold Bitcoin to rebalance risks and cover exposure after recent volatility and losses in the derivatives markets.
Since Wintermute provides liquidity across spot and derivatives markets, its selling had a substantial impact.
The timing of the sales was important as well. Wintermute's activity occurred under low liquidity conditions, exacerbating downward moves and hastening Bitcoin's decline toward 85,000 dollars.
What will happen next?
Whether Bitcoin will drop further now depends on macro follow-up, not on cryptocurrency-specific news.
If the Bank of Japan confirms raising interest rates and global yields rise, Bitcoin may remain under pressure as carry trades decline further. A strong yen will heighten this tension.
However, if markets fully recover and U.S. data smooths enough to revive rate cut expectations, Bitcoin may stabilize after the liquidation phase ends.
Currently, the sale on December 15 reflects a systemic reset rather than a structural failure of the cryptocurrency market — but volatility is unlikely to fade quickly.
