Bitcoin Sinks Below $90K as Rate-Cut Odds Plunge Below 50%

• Bitcoin (BTC) breached $90,000, touching $89,300.46 amid Fed policy uncertainty, extending a 28.6% decline from October’s $126,198.07 peak as December rate-cut probabilities fell below 50%.
• Spot Bitcoin ETFs recorded $2.8 billion in November outflows while corporate treasury strategies at firms like Strategy Inc. (MSTR) faced mounting pressure as prices fell below key accumulation levels.
• Options traders concentrated hedging at $85,000 and $80,000 strikes while $950 million in leveraged positions liquidated over 24 hours, signaling institutional-retail divergence and sustained volatility ahead.

Bitcoin’s (BTC) breach of the psychologically critical $90K threshold has crystallized a broader risk-off rotation across digital assets, with the cryptocurrency touching an intraday low of $89,300.46 amid escalating macroeconomic uncertainty. The current trading level near $91,203.71 reflects a decline exceeding 3% on the session, extending a retracement from the $126,000 peak established in early October that now measures nearly 30% in magnitude. This price action represents the most severe technical deterioration since the April collapse to $74,400, which itself was catalyzed by the Trump administration’s initial tariff proposals.

The immediate catalyst stems from shifting Federal Reserve policy expectations, with December rate-cut probabilities collapsing below the 50% mark. This repricing of monetary accommodation has compressed risk premiums across speculative assets, but the impact on Bitcoin has been disproportionately severe due to the market’s structural fragility following the early-October liquidation cascade. That earlier event triggered more than $19 billion in forced liquidations and vaporized over $1 trillion in aggregate token market capitalization, creating a persistent overhang of underwater positions that continues to pressure support levels.

Options flow data reveals institutional positioning for further downside, with protective put accumulation concentrated at the $85,000 and $80,000 strikes dominating recent volume. This hedging activity reflects not merely bearish sentiment but a rational response to observable stress in the market’s institutional architecture. The cohort of 12 spot Bitcoin ETFs has experienced net outflows totaling $2.8 billion in November alone, reversing the substantial asset inflows that followed last year’s presidential election. These redemptions create mechanical selling pressure as authorized participants redeem shares for underlying BTC, amplifying downside momentum beyond what futures-based derivatives would suggest.

Compounding this dynamic, corporate treasury strategies deployed by public companies such as Michael Saylor‘s Strategy Inc. (MSTR) face mounting pressure as token prices decline below key accumulation levels established during the first half of 2025. These entities, which leveraged balance sheet capacity to acquire digital assets at higher cost bases, must now contend with mark-to-market losses that could trigger covenant reviews or forced rebalancing. The resulting supply from potential treasury liquidations intersects with dwindling retail dip-buying appetite, particularly in speculative altcoins where risk tolerance has evaporated.

Market microstructure indicators corroborate the institutional-retail divergence. While longer-term holders have largely maintained positions, evidenced by stable on-chain metrics for coins dormant over six months, the past 24 hours – as Coinglass data shows – have seen $950 million in liquidations across leveraged long and short positions as volatility forces risk management by trading desks. This differentiation suggests that directional conviction remains intact among strategic allocators but has deteriorated among tactical traders, creating a bifurcated market vulnerable to stop-loss cascades.

Shiliang Tang, managing partner of Monarq Asset Management, correctly identifies the Fed policy pivot as the central variable: with December cuts now a coin-flip probability, crypto markets continue their downward grind after losing the $100K support level that had anchored sentiment through Q3. The loss of this reference point has removed a key technical floor, allowing momentum-driven selling to dominate flows previously absorbed by institutional scale-buying.

Looking forward, Nick Ruck of LVRG Research anticipates sustained volatility as competing forces battle for market control. Long-term accumulators view the current drawdown as an attractive entry opportunity relative to macroeconomic adoption trends, while trading institutions derisk portfolios in response to shifting global macro forecasts. This tension suggests that price discovery will remain unstable until either Fed policy clarifies or Bitcoin establishes a new equilibrium range with sufficient volume-based support to absorb treasury-related supply and ETF redemption pressures.

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