Bitcoin extended its decline Friday morning Hong Kong time, falling below $85,500, according to CoinDesk data, as the market absorbed a fresh wave of selling pressure and another shift in global rate expectations.
The drop leaves BTC down more than 7% in the past 24 hours and more than 20% in the past month, outpacing losses in stocks, which remain relatively firm thanks to strong earnings from Nvidia, which has combatted fears of an AI bubble.
In a note posted on Telegram, market maker FlowDesk said the market continues to struggle with a large supply of coins hitting centralized exchanges from long-dormant Bitcoin wallets, with tens of thousands of coins on the move after years of inactivity.
These flows have outpaced bids, keeping spot activity biased decisively toward sellers. The firm added that managers are now adopting a defensive positioning through the end of the year, more focused on protecting gains than increasing exposure, which has reduced liquidity at key support levels.
FlowDesk also noted that derivatives flows reflect spot weakness, with large buyers of BTC and ETH on the dip and traders reducing put positions to maintain protection as volatility curves remain heavily tilted toward puts.
Deribit options data shows a similar reversal in sentiment, CoinDesk previously reported, with the once-dominant $140,000 call now eclipsed by the $85,000 put, which has become the largest open interest strike in the entire BTC options market as traders reposition for further declines.
As the market continues its slide, all eyes are now on MSTR as BTC price approaches MicroStrategy’s average breakeven point of $74,430.
In a recent note, JPMorgan said the stock’s underperformance reflects growing anxiety over a possible removal of the MSCI index in January, a move that could trigger billions of passive outflows and inject another layer of stress into an already fragile crypto market.
