BTC Falls Toward Mid-$80Ks as Market Structure Weakens Into Year-End

Market Overview - Bitcoin (BTC) has dropped below $85,500, experiencing a decline of over 7% in the past 24 hours and more than 20% over the past month, which is more significant than losses in equities [1] - The market is facing heavy selling pressure and a shift in global rate expectations, contributing to the decline [1] Supply Dynamics - A significant supply of coins from long-dormant bitcoin wallets is hitting centralized exchanges, with tens of thousands of coins moving after years of inactivity [2] - This influx of supply has overwhelmed the bid, leading to a market skewed toward sellers [3] Market Sentiment and Positioning - Market managers are adopting a defensive stance as they approach year-end, focusing on protecting gains rather than increasing exposure, which has resulted in thinner liquidity at key support levels [3] - Derivatives flows reflect the weakness in the spot market, with large BTC and ETH buyers on the downside and traders rolling put positions lower for protection [3] Options Market - Options data indicates a reversal in sentiment, with the $85,000 put becoming the largest open-interest strike in the BTC options market, surpassing the previously dominant $140,000 call [4] Company-Specific Impact - Attention is on MicroStrategy (MSTR) as BTC approaches its average break-even point of $74,430, with concerns about the company's potential removal from the MSCI index in January, which could lead to billions in passive outflows [5]