Bitcoin slides on 'weak' sentiment, Strategy, Coinbase among crypto stocks hit
Bitcoin (BTC-USD) tumbled more than 8% on Monday alongside crypto-related stocks, casting doubt on a year-end rally despite growing prospects of a Federal Reserve interest rate cut.
The world's largest cryptocurrency fell from around $91,000 on Friday to $84,000 on Monday over concerns that Japan could raise interest rates, sparking fears that investors who borrowed Japanese yen to buy assets like US stocks and bitcoin might then rush to reverse those trades.
The last time such an unwind happened, in August 2024, bitcoin plunged from over $66,000 to around $54,000 in just a few days, an 18% drop, Nic Puckrin, investment analyst and co-founder of the Coin Bureau, noted.
"Now that history is repeating itself, it’s wise to prepare for more volatility," Puckrin said, highlighting how the sharp drop last year was followed by a recovery and new highs.
Read more: What is bitcoin, and how does it work?
"Beyond Japan, the macro backdrop remains favorable for risk assets," he said, noting the growing probability that the Federal Reserve will lower rates in December. "If you zoom out, there are still reasons to be optimistic amid all the doom and gloom."
Still, bitcoin exchange-traded funds (ETFs) posted their second-worst month in November, with $3.5 billion in outflows. The token is now down more than 30% from its October all-time high above $126,000.
"While conditions can shift quickly, a sustained rally still appears unlikely in the near term, especially before year-end. But 2026 may present a very different setup," said a 10X Research client note on Monday.
Bernstein analysts noted they are "still looking for clear signs for bitcoin to bottom out."
The token's "price action suggests weak market sentiment, which has impacted digital asset equities," analyst Gautam Chhugani said in a note on Monday morning.
Over the past 30 days, trading platform Coinbase (COIN) is down roughly 20%, stablecoin issuer Circle (CRCL) is down 38%, and Robinhood (HOOD) is down 16%. Bitcoin juggernaut Strategy (MSTR) has declined roughly 40% over the past month.
Concerns that lower token prices could prompt Strategy to sell some of its bitcoin to cover dividend and interest payments on debt have weighed on the stock.
On Monday, the company announced that it had established a US dollar reserve of $1.44 billion to support the "payment of dividends on its preferred stock and interest on its outstanding indebtedness."
Strategy added 130 tokens to its bitcoin holdings last week, bringing its total up to 650,000.
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