Bitcoin Dips to $85,000 Amid Fading Santa Rally Prospects

• Bitcoin led the decline, dropping from $90,000 to $85,833, the lowest since December 1 according to CoinGecko data.

• Ethereum fell over 4% to $2,955, while XRP dropped 4.5% to $1.90, its lowest in December.

• Crypto liquidations reached $573 million in 24 hours per CoinGlass, with long positions accounting for $486 million and Bitcoin topping at $205 million.

Bitcoin price plunge shakes crypto markets as Santa rally hopes fade, with BTC at $85,833 and $573M in liquidations. Stay informed on Ethereum and XRP drops—explore key insights now.

What Caused Bitcoin’s Price Plunge to $85,000 in December?

Bitcoin’s price plunge to nearly $85,000 on Monday stemmed from fading optimism around a year-end Santa rally, leading to sharp declines across major cryptocurrencies. The leading asset fell more than 3% in 24 hours, hitting $85,833—its lowest since December 1, as reported by CoinGecko. This downturn triggered extensive liquidations, exacerbating the market’s overall 3% value loss.

How Are Ethereum and XRP Impacted by the Crypto Market Drop?

Ethereum experienced a steeper decline, dropping over 4% to $2,955, reflecting broader sentiment shifts in the crypto space. XRP followed suit, falling 4.5% to $1.90, the lowest point in December so far. Data from CoinGecko shows that every top-10 cryptocurrency by market cap has declined over the past week, excluding stablecoins pegged to the dollar. These movements highlight the interconnected nature of the market, where Bitcoin’s weakness often pulls altcoins lower. According to CoinGlass, liquidations totaled $573 million in the last day, with $486 million from long positions betting on price rises. Bitcoin accounted for $205 million of these, while Ethereum saw $156 million, underscoring the leveraged bets that amplified the pain.

The overall crypto market capitalization shed more than 3% in the past 24 hours, contrasting with milder losses in traditional markets. The S&P 500 dipped just 0.1%, and the Nasdaq fell 0.3%. However, crypto-related stocks faced heavier hits: Bitcoin miner CleanSpark declined 15%, crypto exchange Gemini dropped 12%, and Ethereum-focused BitMine Immersion Technologies lost 8%. Coinbase shares fell over 5%, with Robinhood showing a subtler 2% dip. These stock movements signal investor caution extending beyond digital assets into related equities.

Bearish sentiment is also evident in prediction markets. On Myriad, a platform under Dastan’s ownership—parent company to COINOTAG—users now assign less than 8% probability to a Santa rally next week, down from nearly 20% a week prior. This shift reflects growing pessimism as year-end trading pressures mount without the anticipated bullish surge.

Despite the downturn, historical patterns suggest volatility is inherent to crypto. The Santa rally, a phenomenon where assets typically rise in late December due to holiday optimism and tax-related buying, has not materialized this year. Instead, macroeconomic factors like interest rate expectations and regulatory uncertainties may be weighing on prices. Experts from financial analysis firms note that while short-term pain is evident, long-term adoption trends remain positive, driven by institutional interest.

Frequently Asked Questions

What Is the Santa Rally and Why Is It Fading for Bitcoin in December?

The Santa rally refers to a seasonal uptick in asset prices during late December, often fueled by holiday cheer and portfolio rebalancing. For Bitcoin, it’s fading due to unmet expectations, leading to a 3% drop to $85,833. Liquidations of $573 million have intensified the decline, as per CoinGlass data, shifting market dynamics toward caution.

Which Cryptocurrencies Are Most Affected by the Recent Market Liquidations?

Bitcoin and Ethereum top the list, with $205 million and $156 million in liquidations respectively over the last day. Assets like XRP at $1.90 show sharp 4.5% drops, while the top 10 coins excluding stablecoins have all declined weekly. This pattern, tracked by CoinGecko, indicates broad-based selling pressure across major holdings.

Key Takeaways

• Bitcoin’s Sharp Decline: BTC fell to $85,833, its lowest since early December, amid a 3% daily drop and fading Santa rally hopes.
• Widespread Liquidations: $573 million in total, dominated by $486 million in long positions, with Bitcoin and Ethereum leading the figures per CoinGlass.
• Altcoin Pressures: Ethereum at $2,955 and XRP at $1.90 highlight the market’s vulnerability, urging investors to monitor traditional indices for correlation.

Conclusion

The Bitcoin price plunge to $85,000 underscores the crypto market drop’s intensity this December, with Ethereum and XRP also suffering significant losses and liquidations reaching $573 million. As bearish signals grow on platforms like Myriad, drawing from insights by CoinGecko and CoinGlass, traders should prioritize risk management. Looking ahead, renewed institutional flows could stabilize prices, offering opportunities for informed investors to navigate the volatility.