Bitcoin’s slide below $86,000 has raised new red flags among analysts at Bloomberg Intelligence, who warn the downturn could be the start of a broader market correction. Senior strategist Mike McGlone said the 7% decline reflects “the opening stage of a deeper pullback,” citing the weakest market structure since early 2024.
The cryptocurrency market suffered its sharpest monthly drop since February, with exchange volumes shrinking to $1.59 trillion and Bitcoin ETFs facing $3.48 billion in net outflows during November. McGlone believes Bitcoin could fall another 35%, possibly retesting the $50,000 level.
He pointed to several pressures, including record-high gold prices, low stock volatility, and the continued expansion of competing tokens, all contributing to weaker Bitcoin momentum.
Yen Carry Trade Unwind Adds Pressure
A growing belief that the Bank of Japan will raise rates in December has intensified risk aversion. Analysts say the unwinding of the massive yen carry trade, estimated between $3.4 trillion and $20 trillion, is forcing traders to exit leveraged Bitcoin positions.
BitMEX co-founder Arthur Hayes noted that Bitcoin’s drop “came as the BOJ put a December rate hike in play,” with USD/JPY between 155 and 160 viewed as a hawkish zone.
Data from Glassnode shows major resistance between $93,000 and $99,000, while the $83,000–$86,000 range now acts as a key support zone. If it breaks, liquidity could drive prices toward $78,000–$75,000.
Institutional Factors and Index Risks
Additional selling came after MSCI proposed excluding companies that hold over half their assets in crypto, potentially triggering forced sell-offs across firms such as Marathon, Riot, and Metaplanet.
“Since index funds must follow strict inclusion rules, any policy change would automatically lead to position reviews,” said Farzam Ehsani, CEO of VALR.
He warned Bitcoin could test $60,000–$65,000 if market weakness continues but added that long-term institutions may see such levels as entry points.
Traders on Kalshi now give Bitcoin only a 29% chance of reclaiming $100,000 this year. The upcoming BOJ policy meeting on December 18 is seen as the key event: a rate hike could deepen losses toward $75,000, while a policy pause might fuel a short-term rebound toward $100,000.
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