Bitcoin extended its slide on Friday morning Hong Kong time, falling below $85,500, CoinDesk data showed, as the market absorbed a new wave of selling pressure and another shift in global interest rate expectations.
The drop leaves BTC up more than 7% over the past 24 hours and more than 20% over the past month, outpacing losses across stocks, which remain relatively flat thanks to strong earnings from Nvidia, which combated fears of an AI bubble.
In a note published on Telegram, market maker FlowDesk said the market continues to struggle amid a large supply of coins hitting centralized exchanges from long-dormant bitcoin wallets, where tens of thousands of coins are moving after years of inactivity.
These flows have overwhelmed the bid and kept spot activity decidedly skewed against the sellers. The firm added that managers are now positioning themselves defensively for year-end, more focused on protecting gains than adding exposure, which has diluted liquidity at key support levels.
FlowDesk also noted that derivatives flows are reflecting the spot weakness, with large BTC and ETH buyers on the downside and traders rolling put positions lower to maintain protection as volatility curves remain heavily tilted towards puts.
Options data from Deribit shows a similar reversal in sentiment, CoinDesk previously reported, with the once-dominant $140,000 call now overshadowed by the $85,000 put, which has become the largest open interest strike in the entire BTC options market as traders reposition for further downside.
As the market continues its slide, all eyes are now on MSTR as BTC’s price edges towards MicroStrategy’s average break-even point of $74,430.
In a recent note, JPMorgan said the stock’s underperformance reflects growing anxiety over a possible removal from the MSCI index in January, a decision that could trigger billions in passive outflows and inject another layer of stress into an already fragile crypto market.
