Cryptocurrency Market Volatility: Multiple Pressures Trigger Large-Scale Crash Can Bitcoin Hold the $80,000 Level?

Market Shrouded in Pessimism: Bitcoin Plunges Rapidly

As this week’s Asian trading session begins, the virtual currency sector continues to face downward pressure. According to the latest market data, Bitcoin is trading around $87,340, down more than 30% from its October 8th all-time high of $126,080. Even more concerning is that this downward trend shows no signs of bottoming out.

Ethereum also performs weakly, currently trading at approximately $2,940, with a monthly decline of 22%, marking its worst performance since the 32% crash in February. Meanwhile, according to CoinGecko data, the entire crypto market has lost over $1 trillion in market cap since its all-time high of $4.3 trillion, severely damaging market confidence.

Bank of Japan Rate Hike as Catalyst: Virtual Currency Faces Chain Reaction

The trigger for this round of crypto collapse can be clearly traced back to the Bank of Japan’s policy signals. Zerocap digital asset trading analyst Emir Ibrahim pointed out that Governor Ueda Kazuo’s remarks last Monday led to a rise in Japanese government bond yields, which in turn triggered a re-pricing of global risk assets, with the crypto market bearing the brunt.

This event directly caused a wave of “yen carry trades” unwinding. Previously, investors borrowed yen at low interest rates and exchanged it for high-yield assets like Bitcoin. As expectations of Japanese rate hikes increase, unwinding these carry trades has become a key factor accelerating selling pressure.

Massive Forced Liquidations: Market Volatility Intensifies

Data from crypto exchanges show that during this decline, forced liquidations have been substantial. According to CoinGlass statistics, nearly $1 billion in total forced liquidations occurred across the crypto market in the past 24 hours, with over $500 million in Bitcoin leverage longs being liquidated.

Bitcoin dropped 6% yesterday, marking its largest single-day decline since early November. Even more noteworthy is that Bitcoin’s monthly decline in November set a record for the largest single-month USD loss since May 2021, evaporating over $18,000 in value.

Structural Demand Deteriorates: ETF Funds Continue to Flow Out

Analysts indicate that this crypto downturn reflects deeper structural issues in the market. Bitcoin ETF capital inflows have significantly weakened, with very limited buying on dips, signaling waning institutional investor participation.

As the world’s largest Bitcoin holder, Strategy Group downgraded its profit expectations for 2025 last week, citing weak Bitcoin performance as the main reason. Its stock price subsequently fell 3.3%, further undermining market confidence. Meanwhile, Coinbase’s stock declined 4.8%, and S&P Global downgraded Tether’s rating, citing increased high-risk assets in reserves and disclosure gaps.

Crypto Enthusiasm Wanes: Synchronized Decline with Tech Stocks

Juan Perez, head of trading at Monex USA, stated that Bitcoin’s decline is not only due to issues within the crypto sector itself but also reflects a cooling of enthusiasm across the entire tech sector. He pointed out that current negative sentiment is closely related to rising market concentration, doubts about sustainable growth, and infrastructure issues.

This assessment is corroborated by global stock market trends. On Monday, global equities generally declined, with the MSCI World Index down 0.40% and the S&P 500 down 0.5%. XTB research director Kathleen Brooks noted in a report: “Bitcoin currently tends to be a leading indicator of overall risk sentiment, and its decline is not a good omen for the stock market’s performance at the start of the month.”

Futures Market Signals Bearish Sentiment: Traders Tighten Defenses

CME Bitcoin futures data reflect increasing bearish sentiment among investors. The premium for futures contracts expiring in three months has fallen to its lowest level in at least a year compared to this month’s contracts, indicating diminished expectations of continued upward movement.

More alarmingly, professional traders are heavily positioning for defensive strategies. Nick Forster, co-founder of Derive, pointed out that the sharp decline in volatility skew suggests traders are heavily buying put options, especially those expiring on December 26th, with open interest concentrated at strike prices of $84,000 and $80,000.

Virtual Currency May Further Test Support: Breaking $80,000 in the New Year Is Not Low Probability

Based on trader position analysis, the probability of Bitcoin falling below $80,000 in early 2026 is not low. Forster believes the current downtrend may not be over, and market participants are pricing in a highly volatile December.

He further noted that short-term implied volatility is higher than long-term volatility, indicating expectations of larger swings as the new year approaches. Historical data shows Bitcoin averages a 9.7% increase in December, but this pattern does not hold in certain market environments.

The crypto market is currently under multiple pressures—external shocks from Japanese rate hikes, structural demand deficiencies, feedback from forced liquidations, and a shift in overall tech asset sentiment. Whether Bitcoin can regain buying support in the short term is critical, with the $80,000 psychological level likely to be the next key test point.