Bitcoin is sliding to start the month, trading near $85,000 and sitting roughly one-third below October’s peak. Here’s a plain‑English answer to why is bitcoin falling December 2025 and what steps you can take right now. The key drivers are a risk-off stock market, Japan’s carry trade worries, thin liquidity, and big-holder selling fears—plus hedges you can use today. Bitcoin’s start to December has been rough. The coin fell as low as about $85,461, almost 32% below its early-October all-time high near $126,200. Ethereum also dropped, hitting roughly $2,800 after a 7% slide. If you are asking why is bitcoin falling December 2025, the short answer is this: fear is high, liquidity is thin, and macro signals are shaky.

Why is bitcoin falling December 2025? The main drivers

1) Risk-off loop hits crypto and tech together

When investors turn cautious, they sell the most volatile things first. Lately, mega-cap tech stocks and bitcoin have moved in the same direction. As prices fall, some traders face margin calls. They sell both stocks and crypto to raise cash. This selling can snowball into a feedback loop. Investor mood remains weak. Major fear-and-greed gauges still sit in “Extreme Fear.” Stocks tied to chips and AI also struggled to open the week, which added pressure to crypto. The Federal Reserve adds more uncertainty. Markets are split on how fast rates might fall in 2026, even as odds of a rate cut in December rise. Unclear policy keeps risk appetite low.

2) Japan’s carry trade faces a reality check

A Bank of Japan official hinted that rate hikes could come sooner. That matters because many traders borrow cheap yen and invest in higher-yielding US assets. This is the yen carry trade. If the cost of yen borrowing rises, this trade can unwind. That means some traders must reduce risk across the board, including in bitcoin. We have seen this movie before. A surprise shift in BoJ policy has sparked sharp global selling in the past, most notably in August 2024. Even a small change in tone can push funds to de-risk, especially in Asia, and that pressure often spills into crypto.

3) Liquidity is thin, so price moves hit harder

Bitcoin’s order books look shallow. That means a big buy or sell order can move price more than usual. Crypto market depth at the end of last week hovered near $568.7 million, down from about $766.4 million in early October. The lower the depth, the higher the chance of fast, sharp moves. There were also big ETF outflows in November. Spot bitcoin funds saw roughly $3.5 billion pulled, which likely added to selling. When investors yank money from ETFs, those products must sell bitcoin to meet redemptions. That pushes price down and can scare other holders into selling.

4) Big-treasury selling fears

A major corporate bitcoin holder signaled it could sell coins if its valuation falls below a key yardstick relative to its bitcoin pile. Recent disclosures suggest its ratio was near 1.2. If it dips under 1 and other funding is hard to get, selling some bitcoin is on the table. The firm reports it holds around 650,000 coins, or about 3% of supply. Third-party tracking has recently estimated a lower active tally, which fueled new rumors. Any sign of actual selling, or even fear of it, can weigh on price. One crypto executive warned that more trouble here could drag bitcoin down as much as 30%, toward $60,000.

What this drop means for traders and long-term holders

Seasonality isn’t a shield

Bitcoin often rallies in late Q4. Over the past 14 years, it finished December higher about half the time, with strong average gains. This year shows that seasonality is not a guarantee. Understanding why is bitcoin falling December 2025 helps you set realistic expectations and avoid “it must bounce” thinking.

Correlation matters

When bitcoin moves with big tech, both can push each other lower in a risk-off spell. If stocks stay weak, crypto may struggle to mount a sustained rebound. Watch the same macro cues that drive equities: rates, inflation data, and central bank comments.

Volatility rises when depth falls

Thin liquidity makes every order count more. Sudden 5%-10% swings can happen without new fundamental news. In such times, stable rules and hedges beat impulse trades.

Hedge your crypto in a downtrend

You do not need to predict the exact bottom. You need a plan that controls risk, keeps you solvent, and gives you a chance to participate if price recovers. Here are practical moves, in plain English.

Set rules first

• Pick a hard risk budget. For example, risk 1% of your total capital per trade, not more.
• Use stop-loss orders or at least price alerts. Do not “watch and hope.”
• Decide in advance when to add, hold, or cut. Write it down to avoid emotion.

Right-size your position

• Cut leverage. High leverage turns normal dips into forced liquidations.
• Shrink positions until you can sleep well. Survival is your edge in bear phases.

Build a partial hedge

• Protective puts: Buy put options on BTC or a bitcoin ETF to cap downside. Size your hedge to cover 20%–50% of your spot stack.
• Covered calls: If you plan to hold, selling calls against part of your position can collect premium and soften drawdowns.
• Futures or perpetuals: Short a small amount to offset spot exposure. Use strict limits to avoid over-hedging.

Spread your bets

• Keep some cash or short-duration Treasurys for dry powder. Cash is an instant hedge.
• Diversify across uncorrelated assets. Even a small slice can reduce portfolio swings.
• Use stablecoins with care. Know the counterparty and custody risks before you park large sums.

Use time, not feelings

• Dollar-cost average on a schedule. Buy small, steady amounts at preset dates. Do not chase green candles or panic on red days.
• Stagger limit orders below spot to avoid guessing the bottom.

Improve after-tax results

• Consider tax-loss harvesting where rules allow. Realize losses to offset gains, then maintain market exposure with a different instrument if needed.

Note: Options and futures carry real risks. Read product disclosures and consider professional advice if you are new to derivatives.

Levels and signals to watch next

Price markers

• Support around the mid-$80,000s. Below that, watch $80,000 and then the mid-$70,000s.
• Resistance near $95,000–$100,000. A strong close back above $100,000 would improve momentum.
• Trend guides like the 200-day moving average. Climbing back above it often signals repair.

Flow and depth

• ETF flows: Net inflows can help stabilize price. Outflows can pressure it.
• Order book depth: Rising market depth suggests healthier liquidity and fewer air pockets.

Macro cues

• Bank of Japan statements and meetings. More hints of tightening can stress risk assets.
• US data and the Fed path. Inflation, unemployment, and policy tone guide risk appetite.
• Sentiment gauges: If fear lifts from “Extreme Fear” to neutral, buyers may return.

What to do if the slide continues

Keep losses small, keep options open

• Honor your stops. Small cuts preserve capital for the next swing.
• Let your hedge work. Avoid turning a hedge into a new gamble by oversizing it.
• Rebalance. If bitcoin falls and cash grows as a share of your portfolio, you can rebalance on your schedule, not the market’s.

Prepare for both paths

• If price bounces, unwind part of the hedge to lock gains and keep upside.
• If price breaks lower, add to the hedge slowly, not all at once.
• Keep notes. Track what helped and what hurt. Good process beats luck over time.

Bottom line

We have clear reasons for the drop: risk-off stocks, Japan carry trade fears, thin liquidity, and big-holder jitters. If you came here asking why is bitcoin falling December 2025, now you know the drivers and the tools. Control risk, build simple hedges, and let time and rules work for you until the trend turns.

(Source: https://www.businessinsider.com/bitcoin-price-today-why-btc-is-falling-crypto-bear-market-2025-12)

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