Bitcoin price plunges toward $85,000 as traders brace for a big week

Market Overview - Bitcoin experienced a significant decline, dropping to as low as $85,400, marking a 5% decrease overnight and continuing a six-week downward trend that began after reaching a record high of $126,000 in late October [1][2]. Value Loss - Since its peak in late October, Bitcoin has lost nearly one-third of its value due to extensive liquidations and sell-offs during October and November [2]. Market Sentiment - Bitcoin is currently viewed as a leading indicator for overall market risk sentiment, and its decline is seen as a negative signal for stock markets at the beginning of December [3]. Economic Data Impact - Traders are closely monitoring upcoming U.S. economic data releases, with expectations of a Federal Reserve rate cut on December 10. However, adverse data on jobs and inflation could impact the timing and extent of these cuts [4]. Structural Headwinds - The market is characterized by a "risk-off" sentiment as December begins, with expectations of ongoing structural challenges. The $80,000 level is identified as a critical support point for Bitcoin [5]. Stablecoin Concerns - S&P Global Ratings downgraded its assessment of USDT, the largest stablecoin, indicating that a further decline in Bitcoin's value could jeopardize its collateral adequacy. Tether, the issuer of USDT, has expressed strong disagreement with this assessment [5]. Other Cryptocurrencies - Other major cryptocurrencies, including Ethereum and Solana, also experienced declines of over 5% on the same day [6].