Bitcoin continued its downturn Friday morning Hong Kong time, falling below $85,500, as the market faced new selling pressure and changes in global rate expectations.
This decline leaves BTC down more than 7% in the past 24 hours and over 20% in the last month, surpassing losses in equities, which remain relatively stable due to strong earnings from Nvidia, alleviating concerns about an AI bubble.
In a note shared on Telegram, market maker FlowDesk indicated that the market is struggling amid a significant supply of coins appearing on centralized exchanges from previously inactive bitcoin wallets, with tens of thousands of coins being moved after years of dormancy.
These inflows have outpaced bids, skewing spot activity significantly toward sellers. The firm mentioned that managers are now taking a defensive stance as year-end approaches, prioritizing the protection of profits over adding exposure, which has reduced liquidity at critical support levels.
FlowDesk observed that derivatives flows reflect the weakness in spot trading, with large BTC and ETH buyers moving to the downside and traders rolling put positions lower for protection as volatility curves remain heavily biased toward puts.
Options data show a similar shift in sentiment, with the previously dominant $140,000 call now overshadowed by the $85,000 put, which has become the largest open-interest strike in the BTC options market as traders adjust for further declines.
As the market continues to slide, attention is now focused on MSTR as BTC’s price nears MicroStrategy’s average break-even point of $74,430.
A recent note from JPMorgan highlighted that the stock’s underperformance is causing growing anxiety about a potential removal from the MSCI index in January, a decision that could lead to billions in passive outflows and add another layer of stress to an already fragile crypto market.
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