5 Reasons Bitcoin Fell to $85,000 — And Why Further Downside Still Can’t Be Ruled Out
Bitcoin dropped sharply to ~$85,000 on Dec 15, wiping over $100B from crypto market cap. The move was driven by a combination of macro and market-structure factors rather than a single headline.
Key Reasons:
1. Bank of Japan Rate Hike Fears
Rising Japanese interest rates threaten the yen carry trade.
Traders unwound risk assets, pressuring BTC.
Historical pattern: BTC often drops 20–30% post-BOJ tightening.
2. US Economic Data & Fed Uncertainty
Recent Fed caution about future easing cooled speculative demand.
Market uncertainty left BTC vulnerable at key technical levels.
3. Leverage Liquidations
Over $200M in leveraged long positions liquidated after BTC slipped below $90K.
Cascade effect accelerated the sell-off, turning a pullback into a flush.
4. Thin Weekend Liquidity
Low liquidity amplified moves.
Even moderate sell orders pushed BTC violently from low-$90K to $85K.
5. Market Maker Selling
Wintermute reportedly sold ~$1.5B across exchanges.
Large-scale selling during thin liquidity added structural pressure.
Outlook:
Macro events will likely dictate the next move: BOJ rate hike, yen strength, US economic data, and Fed expectations.
Current $85K drop is more of a macro-driven reset than a structural breakdown.
Elevated volatility is expected while markets absorb these shocks.
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