Bitcoin is trading at $86,267.10, down by about -4.97% over the last 24 hours.
Global markets entered a risk-averse mood this week, with equities and crypto assets under pressure as investors shifted away from risk. The downturn in equity markets triggered a selloff in high-volatility assets, including Bitcoin. Reports highlight that falling confidence in growth and liquidity conditions have weighed on crypto demand.
Weak demand and stronger global economic uncertainty — including cautious stances by central banks — have undermined sentiment. For Bitcoin, this meant fewer buyers at recent support levels, increasing vulnerability to a sharp drop.
The plunge in Bitcoin has forced major corporate holders to re-assess their exposure. For instance, a leading corporate holder significantly downgraded its annual earnings forecast after writing down parts of its Bitcoin holdings, reflecting anxiety over sustained price weakness.
That move feeds into broader institutional uncertainty — when big holders signal possible selling or write-downs, retail and other institutional investors often react pre-emptively, worsening the decline.
Liquidity in crypto markets has weakened. There’s evidence of large leveraged positions being liquidated rapidly, with longs accounting for the majority of those liquidated.
Additionally, spot-Bitcoin ETFs reportedly saw substantial outflows recently — among the largest since their 2024 launch. Such outflows reduce institutional buying pressure, which in turn opens the door to sharper declines on sell-offs.
On the daily chart, Bitcoin has broken down below key support zones around $90,000–$92,000. The sharp 5 – 7% drop in 24 hours reflects strong bearish momentum, with increased selling volume and weak buying reaction — a classic breakdown after a rally.
On the weekly timeframe, Bitcoin appears to be forming lower highs and lower lows, signaling a shift from the strong uptrend seen in prior months toward a consolidation or correction phase.
Over the last month, Bitcoin has slid significantly from highs near $110,000–$126,000 to the mid-80,000s. That drop wipes out a large portion of the earlier rally, suggesting exhaustion among buyers and a lack of conviction for further upside in the near term. Historical volatility and macro stress support a cautious short-term outlook.
The past week saw increasing volatility — after peaking near the $110,000–$126,000 range in October and November, Bitcoin lost much of that gain. The drop below $90,000 and tests of the mid-80,000s mark a clear shift from bullish momentum to bearish consolidation. Weak demand, leveraged liquidations, and risk-off macro tone all contributed.
For the month ahead, Bitcoin seems to be in a consolidation or retracement phase. With macroeconomic uncertainty, possible further ETF outflows, and institutional pressure, the path to a rebound may be challenging unless liquidity returns or macro sentiment improves. However, a bounce from support near $80,000–$85,000 cannot be ruled out if buyers step in.
Despite the steep drop, this dip could mark a clearing of froth built up during the recent rally. For investors willing to look through volatility, it may represent a reset — not a collapse. Why is bitcoin down today? Because macro stress, institutional re-assessments, and technical breakdowns combined to trigger a sharp sell-off.
Yet, Bitcoin remains the most liquid and established crypto asset, with deep structural institutional and retail interest. For those who look beyond short-term swings, today’s weakness could set the stage for a more sustainable base building.
This coming week will be crucial for bitcoin.
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Krishnan is a Bangalore-based crypto writer dedicated to simplifying complex crypto concepts. He covers blockchain, DeFi, and NFTs, with a focus on real-world asset tokenization and digital trust. Previously he has written on Real Estate related assets for NoBroker. Krishnan holds a B.Tech degree from the College of Engineering Trivandrum.
