Why Did Bitcoin Drop Below $90,000 Again? A Breakdown of the Latest Sell-Off

Market Overview - Bitcoin fell below $90,000 due to liquidation pressure, weak ETF demand, and macroeconomic uncertainty, marking a significant breakdown after attempts to reclaim the $94,000–$95,000 range [1] - Nearly $500 million was liquidated across exchanges, with approximately $420 million in long positions and over 140,000 traders affected within a 24-hour period [2] ETF Demand and Flows - BlackRock's iShares Bitcoin Trust experienced six consecutive weeks of outflows totaling more than $2.8 billion, indicating a declining institutional appetite [3] - US Bitcoin ETFs saw an outflow of nearly $195 million on December 4, 2025, further reflecting weak demand [4] Macro Economic Factors - The Bank of Japan's indication of a potential rate hike added pressure to global risk assets, while traders derisked ahead of the US PCE inflation release, keeping Bitcoin in a cautious holding pattern [4] - The latest US PCE data showed cooling core inflation but remained above the Federal Reserve's target, leading to cautious market reactions [5] Mining and On-Chain Activity - Increased miner stress was noted due to rising energy costs and a falling hashrate, with high-cost operators liquidating BTC to maintain solvency [6] - On-chain flows indicated mixed sentiment, with some accumulation among long-term holders as Matrixport moved over 3,800 BTC into cold storage, while analysts estimated that a quarter of the circulating supply is currently underwater [6] Community Sentiment - Market analysts attributed the recent price movements to excess leverage, thin liquidity, and macro-hedging rather than coordinated price manipulation, reflecting a general sense of fear within the trading community [7]