Why is bitcoin falling? Prices dip below $90,000 levels, wipe out $130 bn from crypto market

Bitcoin's price experienced a downturn, falling to $89,608 as of 11:13 a.m. IST on December 15th. This represents a 0.62 percent decrease over the previous 24 hours. The overall cryptocurrency market capitalization decreased by over $130 billion, settling at $2.98 trillion.

During the morning trading session, Bitcoin's price fluctuated, hitting a low of $87,996 and a high of $89,923.

Riya Sehgal, a Research Analyst at Delta Exchange, noted the impact of these fluctuations on traders. "Approximately 116,000 traders faced liquidation, with total losses exceeding $295 million. This reflects high leverage and fragile market sentiment. Bitcoin is currently consolidating between $87,500 and $91,000, indicating a bearish trend. Ethereum is also fluctuating between $2,900 and $3,180, a level roughly 37.5% below its all-time high."

Other cryptocurrencies also experienced volatility during this period. Over the past 24 hours, ETH increased by 0.23 percent, ADA decreased by 0.73 percent, SOL decreased by 0.21 percent, XRP increased by 0.82 percent, and BNB decreased by 0.50 percent.

Factors Influencing Bitcoin's Performance

Sehgal also pointed to the Bank of Japan's potential policy shift as a contributing factor to Bitcoin's struggles to maintain support above $90,000. Historically, hawkish moves by the Bank of Japan have reduced global liquidity, placing pressure on risk assets. "Each BoJ rate hike since 2024 has triggered a 20–30% Bitcoin drawdown, and traders are again positioning defensively. In the last 24 hours, the market fell 1.01%, extending a 4.83% monthly decline,” she said.

Broader Crypto Market Trends

Nischal Shetty, Founder of WazirX, explained that global markets are experiencing conflicting signals, with easing trends in the West and tightening pressures in Asia. This creates a fluctuating environment for risk assets like cryptocurrencies. While expectations of rate cuts from major Western central banks are improving liquidity, the UK's recent announcement of crypto regulations is adding to market optimism.

Shetty added, "Across Asia, markets are pulling back from risk on assets, mirroring equity market trends as opposed to their potential role as an alternate asset. Structural reforms, favorable demographics, and rising domestic consumption could be favourable catalysts for long-term crypto adoption in Asia. As of now, the East remains cautious and waits on the sidelines for favourable conditions to unfold."