Bitcoin fell below $90,000 during early Tuesday trading in Asia, intensifying a selloff that has erased all of the cryptocurrency’s gains for 2025. Investors and traders are increasingly positioning for further declines, with demand for protective options at $85,000 and $80,000 surging, according to data from Deribit, a Coinbase-owned platform. More than $740 million worth of contracts betting on continued Bitcoin declines expiring in late November have been purchased in recent days, far surpassing interest in bullish positions.
The swift change in sentiment reflects a market where deep-pocketed buyers have paused, leaving smaller traders exposed. Many investors who accumulated Bitcoin over the past six months now find themselves significantly underwater, reducing conviction-based spot demand. Digital-asset treasuries, including firms that stockpiled cryptocurrencies to signal strength in the market, are under mounting pressure to liquidate positions to safeguard balance sheets. While Michael Saylor’s Strategy Inc. continues to acquire Bitcoin, purchasing an additional $835 million recently, peers are facing growing financial strain.
This selling pressure has created a psychological overhang, with investors trapped in positions too deep in the red to buy more, but not yet ready to sell. CoinMarketCap’s sentiment index reports that crypto participants are experiencing “extreme fear,” highlighting widespread caution across markets. Ethereum has been particularly affected, falling to $2,946 on Tuesday, a decline of more than 20% since early October. Analysts note that Ether is especially vulnerable as major digital-asset treasury firms struggle with underwater positions.
Broader macroeconomic factors are also influencing sentiment. Traders are closely watching Nvidia Corp.’s upcoming earnings and weighing expectations for a potential Federal Reserve interest-rate cut in December. The S&P 500’s recent 1% drop adds pressure on risk assets, compounding investor apprehension. Experts suggest that concerns over AI-driven market speculation, combined with central bank signals, are reinforcing a sustained downtrend for Bitcoin and other cryptocurrencies.
The crypto market has already been shaken by earlier liquidation waves, including a $19 billion selloff in early October. Open interest in crypto futures, especially for smaller tokens like Solana, has dropped significantly, reflecting reduced speculative positioning. Analysts emphasize that the current decline is driven more by macroeconomic risk aversion than structural flaws within the crypto ecosystem.
Looking ahead, the market faces heightened volatility as traders navigate extreme fear and uncertainty. While large-scale treasury firms and institutional investors may continue to influence price swings, experts advise monitoring broader economic developments and sentiment indicators to gauge potential recovery or further downside for Bitcoin and the wider crypto market. The current environment underscores the ongoing challenges for digital assets amid complex macro and market dynamics.
