Bitcoin fell below $85,000 today, while $600 million in liquidations indicates a more concerning macroeconomic factor.

Bitcoin fell beneath $85,000 overnight, resulting in nearly $600 million in liquidated long positions across cryptocurrency markets within a 24-hour period as speculation grew that the Bank of Japan will increase interest rates this week.

At the time of reporting, Bitcoin had slightly rebounded to approximately $86,000. The decline eliminated $218.7 million in Bitcoin long positions and $213 million in Ethereum longs, with Coinglass data indicating that over $200 million in liquidations occurred within about an hour as the price approached $86,700.

Market analyses attributed the selloff to renewed concerns that the BoJ will tighten its monetary policy during its upcoming meeting, which could jeopardize the yen carry trade that finances risk assets.

When the BoJ raises interest rates, investors who borrow yen at low rates to acquire higher-yielding assets are compelled to unwind their positions. Previous instances of BoJ tightening have coincided with significant Bitcoin downturns.

Bitcoin remained above $90,000 for a substantial part of December, but once it fell below that threshold, spot selling intensified, and derivatives liquidations cascaded through thin order books.

Macro headwinds compound selloff

Bitcoin continued to decline throughout December due to a weakened risk appetite following the Federal Reserve’s Dec. 10 meeting, where the central bank reduced rates but indicated only limited easing in 2025.

Bitcoin’s decline is linked to a “sell-the-news” response, with traders reducing risk after the Fed upheld a hawkish forward outlook.

Technology and AI stocks experienced declines due to disappointing earnings, dampening the high-beta trade that had previously buoyed crypto alongside speculative equities.

Spot Bitcoin ETF flows also slowed last week, totaling $286.6 million in net inflows. Despite maintaining consecutive weekly net inflows, capital flows are not matching the steady demand that had supported prices throughout much of 2025.

The selloff affected major altcoins as well. Ethereum was priced at $2,921.81, down 4.6% in 24 hours. Solana decreased by 3.3% to $125.05, XRP fell 4.9% to $1.8822, BNB dropped 3.5% to $846.29, Cardano declined 4% to $0.3807, and Dogecoin fell 4.6% to $0.1278.

As Bitcoin dipped below $90,000, leveraged positions established during the previous rally became susceptible.
Long positions were stopped out in waves as the price traversed support levels, with each round of forced selling prompting further liquidations. Thin liquidity during Asian trading hours exacerbated the situation.

The upcoming hours will be crucial in determining whether Bitcoin can recover from the leverage-driven decline.

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