On December 15, Bitcoin experienced a sharp decline, dropping to around $85,000. This extended its recent downward trend amid a confluence of global economic uncertainties, deleveraging activities, and limited market liquidity. The plunge wiped out over $100 billion from the overall cryptocurrency market capitalization within just a few days, sparking debates about whether this sell-off has run its course.
Although no single event triggered the fall, five intertwined factors contributed to Bitcoin’s weakness and may continue to exert downward pressure in the near future.
Concerns Over Bank of Japan Rate Increase Spark Global Risk Aversion
The primary macroeconomic catalyst originated from Japan. Investors anticipated an imminent rate hike by the Bank of Japan (BOJ) later this week—an adjustment that would push Japanese interest rates to levels not seen for decades.
This move is significant because Japan has historically played a pivotal role in fueling global risk assets through yen carry trades.
🚨 JAPAN WILL CRASH BITCOIN IN 5 DAYS!!!
Many are underestimating how much impact Japan’s upcoming actions will have on Bitcoin.
The BOJ is expected to raise rates again on Dec 19.
This might seem minor until you consider:
Japan holds one of the largest positions… pic.twitter.com/0a9Aimfn88
— NoLimit (@NoLimitGains) December 14, 2025
For years, investors borrowed inexpensive yen funds to invest in higher-risk assets like stocks and cryptocurrencies. As Japanese interest rates climb, these carry trades unwind as investors sell off risky holdings to repay their yen-denominated debts.
Bitcoin has historically reacted strongly following BOJ rate hikes; during each of the last three increases BTC dropped between 20% and 30% within weeks. Anticipation of this pattern caused traders to price in declines ahead of time.
The Bank of Japan plans a 0.25% rate hike on December 19
The last three times BOJ raised rates:
– March 2024 → -27% BTC
– July 2024 → -30% BTC
– January 2025 → -30% BTC pic.twitter.com/GNjHyUIV3d— Quinten | 048.eth (@QuintenFrancois) December 15, 2025
US Economic Indicators Rekindle Uncertainty Around Monetary Policy
Around the same time frame, traders became cautious ahead of an important batch of US economic reports covering inflation metrics and employment data.
The Federal Reserve recently cut interest rates but conveyed prudence regarding further easing steps. This ambiguity affects Bitcoin significantly since it increasingly behaves like an asset sensitive to liquidity conditions rather than merely serving as an independent hedge against traditional markets.
With inflation still above targets and expectations for softer job numbers looming large, markets found it difficult to predict Fed policy moves accurately. Such uncertainty dampened speculative appetite while encouraging short-term participants toward caution.
This loss in buying momentum coincided with Bitcoin approaching critical technical support zones — contributing further downside pressure.
MACRO DATA TOMORROW 👇
– 🇪🇺 GDP (Q2)
– 🇺🇸 Nonfarm Payrolls (Aug)
– 🇺🇸 Unemployment Rate (Aug)
MOST LIKELY TO CAUSE VOLATILITY! pic.twitter.com/eiVJI7Bmxx
— Mister Crypto (@misterrcrypto) September 4 , 2025
Liquidations Fueled By Excessive Leverage Accelerated Price Drops
Once bitcoin fell below $90k mark , forced selling dominated trading activity .
Derivatives data revealed more than $200 million worth long positions were liquidated rapidly . Many bullish traders had crowded into leveraged bets after fed ‘ s recent rate cut earlier this month .
When prices declined , automatic liquidation mechanisms sold bitcoin aggressively causing cascading losses which pushed prices even lower creating feedback loop effect .
This mechanical process explains why decline was swift instead gradual .
Crypto Liquidations On December 15. Source: Coinglass
Lack Of Liquidity During Weekend Trading Amplified Volatility Spikes
Timing worsened impact since breakdown occurred over weekend when market depth thinned considerably leading smaller orders capable moving prices sharply upwards or downwards easily . Large holders along with derivatives desks trimmed exposure amid low liquidity exacerbating swings even further pulling bitcoin swiftly from low-$90k territory towards $85k range within short period . Weekend crashes often appear dramatic despite unchanged fundamental backdrop underlying them .
Bitcoin Price Chart. Source: CoinGecko
Sizable Sales By Wintermute Increased Spot Market Pressure Significantly
Market structure stress intensified due large-scale selling activity by Wintermute – one among crypto sector’s major market makers – who dumped substantial amounts exceeding estimated value over $1.5 billion across centralized exchanges during downturn phase according blockchain £t marketplace data analysis report released recently.. The firm reportedly sought risk rebalancing plus offsetting derivative losses incurred amidst volatility spikes.. Since wintermute provides liquidity spanning both spot &; derivatives venues simultaneously its sales exerted disproportionate influence amplifying negative price action substantially..
![](http://cnews24.ru/uploads/d09/d094f2868d9ae66e2ace0cebf5cf562ef81a9bf4.jpg")
Wintermute Sending Bitcoin To Centralized Exchanges. Source: Arkham
T iming also played crucial role because wintermute ’ s transactions took place during periods characterized by thin liquidity conditions which magnified downside momentum accelerating slide towards approximately eighty-five thousand dollars threshold quickly ..
< ; h２ > ; What Lies Ahead? </ h２ > ;
< ; p > ; Future direction depends largely upon macroeconomic developments rather than crypto-specific events alone .. If bank japan proceeds confirming expected hike pushing yields globally higher then ongoing unwinding carry trades could keep btc pressured longer term especially if strong yen emerges adding strain .. Conversely if markets fully absorb move beforehand combined us economic softness rekindling hopes fed easing cycle resumes then btc might stabilize post liquidation wave subsides .. For now december fifteenth correction reflects broader macro reset not structural collapse however heightened volatility likely persists near term ..</ p> ;
&l t;br /&r t;br /&r t;br /&r t;br /&r t;br /i></ i gt ;The post “Five Reasons Behind Bitcoin's Drop To Eighty-Five Thousand And Potential For Further Declines” originally appeared at BeInCrypto.</ p&r gt ;