Bitcoin's value has continued to decline, recently falling below $86,000 for the first time in two weeks, marking a drop of over 31% from itsall-time highof more than $126,000 in early October, after investors who rushed to buy during the price surge began to gradually sell off their holdings.
In recent weeks, Bitcoin and other risky assets have continued to fall. However, unlike other risky assets that have rebounded, Bitcoin has not followed suit, indicating that the usual positive correlation between Bitcoin and other risky assets—where they rise together—is starting to break down.
Analysts now believe Bitcoin's recent decline is due to a market squeezed by weak liquidity and reduced risk appetite, despite the U.S. Federal Reserve's recent interest rate cut last week.
Chris Newhouse, Research Director at Ergonia, a company specializing in DeFi, stated that this Bitcoin downturn differs from past sell-offs because it is not caused by forced liquidations but mainly results from the investment position structures in the spot and derivatives markets.
Chris Newhouse also added that investors who used excessive leverage were likely liquidated earlier. This means the remaining selling pressure now is more natural rather than system-driven. However, this type of selling could be prolonged and put sustained pressure on prices, signaling a critical development the crypto market must closely watch toward the end of this year.
Amid ongoing crypto market pressure, Strategy, known as one of the world's largest Bitcoin treasuries, continues to buy more Bitcoin. The company revealed on Monday that it has purchased nearly $1 billion worth of Bitcoin for the second consecutive week.
Strategy stated that its recent Bitcoin purchases were mainly funded by selling Class A common shares through an at-the-market offering, gradually selling shares at current prices. This has drawn criticism that continuous share sales could dilute existing shareholders' equity and erode the premium price at which Strategy's shares previously traded above the net asset value of its Bitcoin holdings, currently valued at about $59 billion.
Additionally, Strategy has sold three of its four types of perpetual preferred shares to raise funds supporting its latest Bitcoin acquisitions.
Overall, the crypto market remained battered on Monday, with major cryptocurrencies like Ether, Dogecoin, and XRP falling about 5%, while stocks of crypto-related companies were also sold off.
Strategy's own stock fell more than 9% at times during trading, while Coinbase Global, a major U.S. crypto trading platform, saw its shares drop approximately 7%.
Previously, Bitcoin hit its lowest point of 2025 at $74,400 in April, following President Donald Trump's announcement of the first import tariff plan, which shook global financial markets and triggered broad declines in risky assets.
Source:Bloomberg
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