Bitcoin faced new predictions of a deeper price crash as it briefly fell toward $85,000 during sharp volatility at the monthly close. Traders blamed the move on thin liquidity, raising concerns about further weakness as December begins.
BTC dropped around 5% in a sudden swing, with BTC/USD touching lows near $85,000. Many analysts warn that December could bring continued bearish pressure. Key U.S. inflation data is also due this week, and markets still expect a Fed rate cut despite worries about Japan’s financial stability.
The Coinbase Premium, an indicator of U.S. demand, slipped back into negative territory after the dip. At the same time, the amount of stablecoin “dry powder” on Binance rose to record levels, suggesting a large amount of sidelined capital.
Analysts warn of a potential $50,000 target
Bitcoin quickly returned to its pre-Thanksgiving trading range. Data from TradingView showed a classic “Bart” pattern as December opened. BTC fell to $85,616 before recovering slightly. CoinGlass reported more than $600 million in liquidations over 24 hours.
Traders reacted with caution. Some analysts described a return to $50,000 as “inevitable.” Others warned that Bitcoin must reclaim the $88,000–$89,000 zone to avoid dropping toward November’s lows. Veteran trader Peter Brandt even revived the possibility of a move below $40,000, arguing that Bitcoin’s bounce above $90,000 may have been a “dead cat bounce.”
Still, some traders envision a wider consolidation zone between $80,000 and $99,000. However, they warn that Bitcoin must regain the 50-week EMA—currently near $99,800—before a renewed bullish outlook becomes likely.
November closes with Bitcoin’s worst month since 2018
BTC ended November down 17.7%, its sharpest monthly decline since the 2018 bear market. Quarter-to-date losses now stand at 24.4%, mirroring the steep correction from Bitcoin’s 2017 peak.
Historically, a red November often leads to weak performance in December. Analysts also highlighted increasingly thin liquidity, which has contributed to rapid price swings.
Despite this weakness, some analysts say the downturn is not a “fundamental decline” but rather part of Bitcoin’s broader structural bear phase. CoinGlass data showed new sell orders forming above spot price, while $85,000 continues to act as short-term support.
Markets watch Japan and U.S. inflation data
Investors now shift their attention to the Personal Consumption Expenditures (PCE) index—the Fed’s preferred inflation gauge. The release comes less than two weeks before the next interest rate decision. FedWatch data shows markets pricing in an 87% chance of a 0.25% rate cut.
Concerns also rose after a spike in Japan’s 10-year government bond yield, which reached its highest level since 2008. Some analysts believe the Bank of Japan may be turning more hawkish, which contributed to downward pressure on BTC.
U.S. demand signals weaken as Coinbase Premium fades
As U.S. traders return from the Thanksgiving break, attention shifts to how Bitcoin performs below $90,000 during U.S. market hours. The Coinbase Premium Index, which tracks buying pressure from U.S. investors, only recently turned positive. The latest dip has put that recovery at risk.
CryptoQuant data shows the premium was negative for most of November, only flipping positive briefly during the holiday period. Analysts say that while a positive premium is encouraging, the signal takes time to impact price direction.
Stablecoin reserves hit new records
Despite nerves about the bull market’s future, stablecoin metrics tell a different story. Binance now holds its highest-ever ratio of stablecoins relative to Bitcoin. This indicates record levels of sidelined capital ready to deploy if market sentiment improves.
CryptoOnChain noted that stablecoin reserves are at their highest point in more than six years. Historically, such conditions have preceded major Bitcoin rallies because large pools of liquidity can quickly move into BTC during a reversal.
